Why the U.S. rally looks vulnerable from abroad

Discussion in 'Trading' started by truetraderone, May 1, 2007.

  1. http://www.marketwatch.com/news/sto...x?guid={5C5174CB-F9DA-4A95-B87E-7BB648ADDC16}

    A view from abroad
    Commentary: Why the U.S. rally might be vulnerable
    By Michael Kahn
    Last Update: 5:46 AM ET May 1, 2007

    NEW YORK (MarketWatch) -- A few weeks before the Dow Jones Industrial Average blasted through the 13,000 level for the first time, some analysts were commenting that the ongoing rally was an illusion.
    The reason is that the currency in which Dow industrials stocks are priced -- the U.S. dollar -- was falling fast. And if the greenback is lower it takes more of them to buy the same chunk of Microsoft. That pushes stock prices higher, even if nothing else changes.
    From our domestic point of view, however, we earn, spend and invest in dollars. If the Dow goes up, then we make money -- period. But what about the rest of the world? And why should we care?
  2. I posted the article as well...good to see it in writing and graphics though it is clearly the case. Cheers. :D