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8 Points On The Investment Climate And The Dollar

1. The swing in the pendulum of expectations back toward a mid-year Fed rate hike is one of the key developments that will shape the investment climate. The data in the week ahead, including the broader measures of the labor market, like the Fed's new index (Labor Market Activity Index) and JOLTS (Job Opening and Labor Turnover Survey), and core retail sales will strengthen the view. The rise in US interest rates will lend the dollar support and allow the appreciating trend to continue after a consolidating over the last few weeks. Equity investors need to adjust to the rise in interest rates. High dividend payers and utilities are vulnerable. US companies have expanded overseas more by direct investment than exporting. That means that while they earn revenues in foreign currencies they also incur local costs. In addition, many producers price and invoice in dollars. In any event, in a… Read More …