{"id":72670,"date":"2009-12-09T08:42:00","date_gmt":"2009-12-09T13:42:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/here-it-is-the-actual-dollarstocks-correlation-2009-12"},"modified":"2009-12-09T08:42:00","modified_gmt":"2009-12-09T13:42:00","slug":"trading-the-dollarstocks-correlation-is-complete-bunk","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/72670","title":{"rendered":"Trading The Dollar\/Stocks Correlation Is Complete Bunk"},"content":{"rendered":"<p><div style=\"float: left; padding: 15px 15px 15px 0;\">\n<script type=\"text\/javascript\">\/\/ <![CDATA[\ntweetmeme_source = 'moneygame'; tweetmeme_service = 'bit.ly';\n\/\/ ]]><\/script><br \/>\n<script src=\"http:\/\/tweetmeme.com\/i\/scripts\/button.js\" type=\"text\/javascript\"><\/script>\n<\/div>\n<p>This should throw some cold water on the &#8216;weak dollar explains the market&#8217; camp. This includes even many professional traders, who frequently just sort of adopt market memes and start repeating, with short memories and a lack of investigative effort. As long as they&#8217;re making money, and it seems to be due to their skill, then nobody complains.<\/p>\n<p>Yet here is a long-term correlation between the U.S. dollar and stocks, from Morgan Stanley.<\/p>\n<p>Actually, stocks have usually rallied while the U.S. dollar was <em>strengthening. <\/em>More importantly, it&#8217;s clear that overall the correlation reverses pretty often, and suddenly. Thus the dollar seems pretty undependable as a signal for stocks. It looks pretty right for a bit&#8230; and then it&#8217;s completely wrong.<\/p>\n<p style=\"padding-left: 30px;\"><span style=\"text-decoration: underline;\">Morgan Stanley:<\/span> First, there is now a tight inverse correlation between the dollar and equity markets. This is unusual: Exhibit 2 shows that equity markets and the dollar usually are positively correlated (so dollar strength goes hand-in-hand with rising equities). Consequently, this correlation could weaken if the dollar strengthens because US growth and rates are expected to rise.<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/~~\/f?id=4b1fa4550000000000d54b4d&amp;maxX=600\" border=\"0\" alt=\"dollar\" width=\"600\" \/><\/p>\n<p><em>(Via Morgan Stanley, &#8216;Dollar: Ouch&#8217;, Gerard Minack, 9 December 2009)<\/em><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/here-it-is-the-actual-dollarstocks-correlation-2009-12#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/pimco-stop-panicking-about-the-weak-dollar-its-awesome-2009-12\">PIMCO: Strong Dollar Supporters Will Create The Next Crisis<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/dollar-worriers-are-they-legitimate-or-just-cranks-who-hate-obama-2009-12\">Dollar Worriers: Are They Legitimate, Or Just Cranks Who Hate Obama?<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/use-google-to-make-1000s-of-dollars-people-sued-by-google-2009-12\">&quot;Use Google To Make 1000s Of Dollars!&quot; People Sued By Google<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/x_g0_hshIkE\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This should throw some cold water on the &#8216;weak dollar explains the market&#8217; camp. This includes even many professional traders, who frequently just sort of adopt market memes and start repeating, with short memories and a lack of investigative effort. As long as they&#8217;re making money, and it seems to be due to their skill, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-72670","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/72670","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=72670"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/72670\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=72670"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=72670"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=72670"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}