When people are lighting up my inbox like a Christmas tree that the market is selling off because Meredith Whitney said something about selling the financials, you know people who don’t do macro are pulling at straws…
The New Reality is this: when the US Dollar goes up, everything priced in dollars goes down. So far this morning, the US Dollar is UP – and the market is DOWN. Sorry Meredith fans – if she were only that good…
Why is the US Dollar up on the day? Simple – the US jobs picture continues to improve. This is very straightforward in the chart below. This week’s jobless claims of 550,000 improved sequentially, dropping below the 4-week moving average (562,000).
As the jobs picture improves, Bernanke will be forced to remove this ridiculous “emergency” ZERO interest rate policy. As the bond market continues to discount rate hikes (higher yields across the curve), the US Dollar should at least stop going down.
As the US Dollar stops going down, stocks stop going up…
When good news is bad – that’s what this is – it’s not about an analyst making a call.
KM
Keith R. McCullough
Chief Executive Officer
