Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 179.58

-0.7%

9:30 AM EST

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To: Jim Willie CB who wrote (116874)	4/19/2002 10:02:08 AM
From: Wyätt Gwyön	of 152472

the reason a US dollar decline is bearish for US equities is straightforward: foreigners' US stock holdings will decline in local currency value, but worse, bond values will also decline. this will cause foreigners to sell US stocks AND bonds, thereby driving up interest rates. as interest rates rise, the PE multiples for stocks will decline. all of these factors are very bearish for US equities and bonds in the event of a dollar decline. the situation is exacerbated by the very high trade deficit, which foreigners may only care to finance at much higher interest rates if the USD falls. high interest rates are similarly bearish for the economy, as they will drive up mortgage rates, thereby reducing refi activity and perhaps causing weakness in the housing sector, which has been the main source of spending power for the consumer.

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