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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (81023)	6/18/2002 9:25:58 PM
From: t2	Respond to of 99280

The only benefit of a weaker dollar is for major exporters, and for companies deriving a large portion of their revenues overseas, the former become more competitive, the latter report higher revenues in dollars for the same sales in foreign currencies. thanks. That is why I wonder about a "flight to quality" of a different sort than what we are used to. Out of bonds and into those types of stocks...or simply buying up of the largest US companies...DOW being a good way to do this. Automakers also gain. A drop in the dollar should theoretically create a big surge higher in the DOW simply because it is representative of the types of companies that you stated would benefit. For now, the bond yields seem to be holding up..and there does not appear to be much panic in the treasuries even though dollar is hitting lows. I wonder if this type of trading could take place if the dollar index breaks further below 110 level where it is now. The drop seems to have accelerated recently. Such a trade may only be temporary but can be HUGE if the concerns about the dollar get more serious than they are right now. I had read an article a while ago on this and how DOW and Gold would rally...we also know how the Argentina stock market just popped big ahead of the breaking of the dollar peg...it was panic move into the market. Obviously there are quite a few differences between US and Argentina financial markets.