Paul,
Was just listening to CNBC and they had a discussion as to how the high US DOLLAR is an important factor.
Not able to confirm if all their facts are correct, but the one of great interest was that it was stated that US manufacturing is 30% reliant on exports. Hope I quoted that correctly. So this lead to the arguement that the high USD is hurting US manufacturing.
Then another commentator mentioned that with the weakness overseas, where else is better to put your money than the US, which of course will help the US stock market.
My comment/question is how long can/will the foreign countries in trouble stay in financial woes. With they always be in financial woes, or eventually will they recover - of course most of them will eventually recover, if not that could lead to worse environments like civil war that could expand beyond their individual borders.
So lets assume that they will eventually recover. So when they do recover, wont that pull money out away from the US MARKETs.
When the JAPAN market peaked in 1989/1990, we are all aware that alot of YEN started migrating to the foreign markets especially the US, which had to help fuel the huge BULL run in the US from about 1995-2000. Im sure that with SINGAPORE and TAIWAN in/near recession, there is significant amount of their money also moved to the US, and lets not forget about EUROPEAN money, and maybe also S.AMERICAN monies, in light the Argentinian financial woes.
WOW, with all this foreign funds the DOW hasnt really moved in almost 2 years, and the NAZ is down 3000 points.
Even if our economy improves down the road, what impact will it have when the foreign countries start recovering and they start to pulling they money back home.
Im a firm believer that there are 3 main factors that moves a market in either direction: EARNINGS/ INTEREST RATES/ LIQUIDITY. So will better earnings down the road offset the exiting of foreign monies, once overseas improve? Which side will win that tug of war? I aint predicting, just presenting a possible senerio.
My position now is not to overly bullish, nor overly bearish, just a cautious/nible trader waiting for international/domestic financial environment become clearer. |
