Related they all are: the dollar, interest rates and the commodities. Of course we’re hoping that for gold this will be the big one, but then the dollar has to go down further (which I don’t believe) or gold needs to rise as a stand alone.
We believe we still are in a disinflationary environment, so the dollar will not run too far and the FED will cough up more QE by buying up bonds.
If the dollar continues to decline, how are specific asset classes reacting? What’s the historical correlation to the dollar of the 10 sectors within the S&P500.
From David Rosenberg:
We believe we still are in a disinflationary environment, so the dollar will not run too far and the FED will cough up more QE by buying up bonds.
If the dollar continues to decline, how are specific asset classes reacting? What’s the historical correlation to the dollar of the 10 sectors within the S&P500.
From David Rosenberg:
• Basic materials 87% inverse correlation
• Consumer staples 79% inverse correlation
• Industrials 62% inverse correlation
• Consumer discretionary 34% inverse correlation
• Utilities 28% inverse correlation
• Financials 22% inverse correlation
• Health care 18% inverse correlation
• Tech 5% positive correlation
•Telecom 13% positive correlation
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