OT, >> it's the interest rates,
Sam, Did you see today ? un-employment applications down dig. The market down big. Tomorrow, the labor report, which I expect will show a large increase in employment.
Remember, GDP was up 4.6%, which is very good, and sustainable. Better than 8%, which is not sustainable.
Now to see if hatered of the US is affecting buying of US made goods. I really don't think so. The US makes few goods competitive enough for export. Nearly everything on store shelves is made in China. So that's not a big deal.
The real big deal is tourism into the US. That has fallen, and does not appear to be recovering, just because it is such a hassle to travel into the US. So that has an effect, but it is not for tech goods. Routers, PC's, disk drives, and such.
OK, now to something that might really make a difference. Which is the amount of dollars that foreigners invest into US equities. Remember, when the market crashed in '00, foreigners who had about 15% of US equity holdings, basically saw their investments wiped out.
So the question to ask is: Can stock prices go higher without some way of suckering in foreign money ? That's where current inept and arrogant policies are playing a role. Add to that the fear that if some Saudi sheik drops a few riyals in the Friday collection basket, he may be accused of aiding terrorism, and his US assets confiscated. I think they just take the safe way, and transfer their money to Euros.
I wish the WSJ or Barrons or Fed publishes a study of what caused the simultaneous drop in the dollar and rise in Euro. I have to think it was transfer of assets. And when oil pricing abandons the dollar, then I think the trend will increase.
My conviction is that the hurt will be mostly on high P/E stocks. Since they are the ones that need suckers to inflate their prices. That's why I stick by good old wdc. Of course you can tell how smart that was, so far.
Sarmad |
