3WOOD: Market Update

Destruction of Dollar Pushes Stocks Up

The recent surge in the stock market is due to the ever continuing decline of the dollar thanks to our fiscal and monetary policy. There is no real good news in the economy right now to base the increase in the market on. At Marketwatch you find this:

U.S. stock market steps higher on diminished dollar; Australian rate hike comes in contrast to U.S. central bank stance

In particular, dollar-based commodity stocks including energy, basic materials, mining and multinationals all are benefiting from the greenback's decline.
And as the dollar rebounds, or declines further, U.S. stocks likely will be sensitive to those moves, market professionals say.
"Investors appear anxious to move funds to hard commodities and commodity-based equities as a hedge against the falling dollar," Fred Dickson, chief market strategist at Davidson Cos., wrote in a note.

You see, investors are moving their money into stocks that wil rise with the coming high inflation that just has to happen.

On Wall Street, energy and material shares fronted a second day of gains, with gold hitting a new high and crude up to nearly $71 a barrel. Read Metals Stocks and Futures Movers.
With gold on Tuesday closing at just under $1,040 an ounce, a growing list of gold exchange-traded funds are an increasing draw for cash. See ETF Investing.
The weak dollar "gives a boost to the earnings line but we're much more interested in seeing top-line growth, whether it comes from overseas or not," said Paul Nolte, director of investments at Hinsdale Associates. "The dollar certainly helps, but we see it only as a temporary boost."

As I have been saying for a while, get ready for double digit unemployment and inflation to boot. Only a fool would look at the recent jump in the market and conclude that it is due to the economy "turning around". It is based on the dropping dollar, not GDP growth or employment increases. Between the expansionary monetary policy and the spend-spend-spend fiscal policy mindset in Washington, we are in for a truly rough time of it for the foreseeable future.

How is that hope and change working for you?