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CHART OF THE DAY: THE DOLLAR/STOCKS CORRELATION

Due to its near-sighted nature, the stock market has tended to overlook the weakness of the dollar.   While many investors falsely argue that the falling dollar is an overwhelming positive for stocks (due to increased overseas revenues and increasing real prices) it is in fact more representative of the world’s long-term secular move out of dollars and into other currencies.  The correlation between stocks and the dollar has become almost perfectly inverse in the last year as investors ignore the long-term ramifications of money printing in favor of one last slurp from the punchbowl:

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Source: Bloomberg

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