Will a U.S. Dollar Decline Be Good for Stocks?

Will a decline be good for stocks? It is an interesting question, given that during 2022 there was a significant non-correlation between the dollar and the stock market. The strong dollar rally was something I suggested could be a problem for stocks, given what happened in 2020. It was a running debate with Michael Brush, who writes for MarketWatch.

Lance Roberts Tweet

He argued the dollar would remain weak, leading to a continued stock market rally. Contrarily, our argument also underpinned our thesis to buy energy stocks in November of that year as the most hated assets became leaders.

Twitter Chat Tread

That last comment is the most important. In 2021, the dollar decline provided a tailwind to stocks. Such makes sense, given that 40% of corporate revenues are from international sales.

SP500-Aggregate Revenue Exposure Percentage Chart

As I stated to Michael, the risk to portfolios is a reversal in…

Read more…

Request a Call Back

Contact Info