^VIX at a 52 week lowwww!!!!!!
- Thread starter S2007S
- Start date
Sure. I simply think it will take pressure off the FED to raise interest rates and let them find yet another "plausible" excuse to not do anything. Essentially the global market gives the FED a face savings opportunity here. That increases their options to do something else in the future when it becomes more clear where the economy is headed. in other words, I think the currency discount is opportunistic with respect to FED desires to cool off the economy somewhat without invoking too much intrusive and aggressive policy change that might disrupt domestic markets.
With lower dollar value exports should in theory improve for the US to improve foreign trade imbalances. But it remains to be seen if this will materially increase the cost of doing business for foreign companies dumping cheap goods here and worsen our own inflation issues. For example, we rely on China to hold our costs for many household goods down with cheap goods to help keep inflation in check; we need each other. It might all be a wash but time will tell of course.
TS
The vix isnt that important. If is just a statistic. It has little if any predictive power. JMHO
Thanks - I am recently always suspicious when I see "Fed" and "more options" in one sentence since almost everybody seems to be o drugs and rumbles about cutting rates.
Personally I believe that dollar weakness brings with certainty only one thing - and that is higher inflation.
It is important to realize that one of two reasons US core is elevated is significant dollar weakness in previous years. If housing settles we are going for a ride (rates up) which will not be the best thing for stock... Still I am quite positive - US stocks should simply slow down the rally speed because economic fundamentals did not look much better ever! There was never so much wealth being generated so evenly split around the word.....and US markets are still among the top candidates for investing the results of that.
This is personally what I am hoping for. With the dollar being so low I expect foreigners to come rushing in to buy up "cheap" dollar denominated equities and pushing our domestic markets up even more with a surge of buying pressure. Putting myself in their shoes though the fundamentals suggest that may have further downside risk and the issue becomes one of timing. It would be upsetting to enter into a US equity and find that stock growth was overcome by further dollar erosion. However, getting into US equities at this point may be quite compelling to foreigners since I think that there is a lot of upside opportunity for dollar exchange improvement as well as equity appreciation; and that gives a double benefit when exiting longer term.
The fundamental question becomes "is there more currency downside risk than upside opportunity". I am not a currency expert but if down pressure continues I'd say at some point the US has to start stepping in to support the dollar. That to me limits the down side risk substantially and leaves open a world of opportunity and for time to improve the dollar to the upside.
TS
Boy that Thanksgiving shortened trading week did wonders for the Vix I think we gapped up 10% during the shortened trading days, pretty neat trick, now the stock market can go higher.
Up up and away!!!!!!!!!!!!!!!!!!!!!
Up up and away!!!!!!!!!!!!!!!!!!!!!