Are we going to follow the 2003 script into year-end? The S&P rallied almost 5% in the final month of the year after a steady climb throughout 2003.
The rally at this point appears to be entirely dependent on a weaker dollar. So let me get this straight: investors want to sell dollars because they are certain that the U.S. government will maintain a fiscally irresponsible policy approach for years to come and yet these same investors believe it is prudent to purchase equities with some portion of this dollar funded trade? That sounds oddly similar to what investors in Japan did in the early 90’s. How did that end? This falling dollar, rising stocks trend is not a sustainable trade or growth strategy.