Something behind market sell-off no one is talking about: Strong dollar

[Yo_Mama_Been_Loggin]

Stocks investors are spooked about a lot of things, and the strong dollar biting into earnings growth is now one of them.

The dollar index , which measures the greenback versus a basket of other currencies, jumped 0.6 percent to 97.43 Monday, a 17-month high. As the dollar rose, the Dow Jones Industrial Average lost more than 400 points, and the S&P 500 was down 1.3 percent at midday.

The dollar's strength Monday was largely attributed to weakness in the British pound and euro because of negative Brexit news and concerns about Italy's budget. But the dollar has also been rising on trade war concerns, rising U.S. interest rates and weaker growth rates outside the U.S.

"It could be a challenge for the stock market in the fact that about 40 percent of the S&P 500 earnings are generated from outside the United States," said Michael Arone, chief investment strategist at State Street Global Advisors. "As the dollar strengthens, that has certainly created risk to those earnings. Another thing that could be a risk is, as the global economy has been slowing this year, the rising dollar poses a problem for many countries outside the U.S. and that has contributed to the slowdown in growth. The question is whether the U.S. economy can withstand a slowdown in global growth, and I don't think it can in the long run."

https://www.msn.com/en-us/money/markets/something-behind-market-sell-off-no-one-is-talking-about-strong-dollar/ar-BBPD3UU?li=BBnbfcN

[Wellstone ruled]

1. That is only one of the

Trip Wires. The World Markets are reacting to the US massive screw up with the Tax Cuts and the ballooning Debt caused by this Tax Cut.

Bond interest rates are climbing and that adds to the math equation. Is it going to get worse,check the VIX,it is now going crazy signaling more sell off.

After hearing Debbie Dingle yesterday,layoff announcements are about to hit.

[grantcart]

2. Current sell off is tied to sharp decline in oil prices

[Wellstone ruled]

6. The only Oil that is dropping is

Bitumus or heavy Crude which comes form Utah and the Tar Sands of Canada. 19 to 20 dollars a barrel and no one wants it. Refineries and certain ones in the Mid West use this as feed stock and it appears they have plenty on hand.

[grantcart]

7. Nope virtually all oil commidites are down. Crude has lost 20% since Oct big drop this weekend

https://oilprice.com/oil-price-charts

Opec basket has been tumbling for the last two weeks losing almost 14%

They lost 2 1/2% today and appear to be going south through the psychological $ 60 per barrel price tomorrow

https://oilprice.com/Energy/Energy-General/Saudis-Scramble-To-Stop-Oil-Price-Slide.html

Saudi Arabia is moving quickly to halt the slide in oil prices, telegraphing a production cut intended to erase some of the re-emerging supply surplus.

Saudi oil minister Khalid al-Falih said on Monday that the kingdom would slash oil exports by 500,000 bpd in December, a move that would go a long way to reversing the 1 million-barrel-per-day increase in output agreed to by OPEC+ in June.

It was only a few weeks ago that al-Falih was trying to reassure the market that Saudi Arabia had enough spare capacity in the event of an outage; now he is rushing to try to stop the slide in prices but paring back production.

The production cut would come just after crude oil officially entered bear market territory, falling 20 percent from its October peak.

But it is unclear at this point if the rest of the OPEC+ coalition, including Russia, will join the Saudis.

[Wellstone ruled]

8. Going to turn on the Bloomy in about a hour.

If the Brent and West Texas is off 20% . Things will get butt ugly over night. Hunch China will start making some moves on Iranian Oil via a South American Country.

Still watching the VIX,this will be the Trigger.

[grantcart]

9. 20% since high in Oct. OPEC will cut production

[Wellstone ruled]

10. Crazy as it sounds.

We had a 3 cent retail gas price increase mid morning today. Go Figger.

[grantcart]

13. See 11

[grantcart]

11. That could be because it is a "boutique blend" meaning that it is

A particular blend that has a segregated market because of State by State requirements and therefore isn't really fungible or fluid with international markets but has a separate supply and demand sub market.

[Wellstone ruled]

14. Kind of doubt the

boutique think. Our market is controlled by one Distributor based out of Texas. It boils down to this,how much can we suck out of the market before the public burns us down.

[MarvinGardens]

5. VIX

When I used to follow it, when VIX popped above 20 after a long time below it, it usually was not a good sign.

[Maeve]

3. But...but...strong dollar GOOD!

Narrow focus is a major reason for mis-reading economics

[empedocles]

4. Also, with stock indices looking 'toppy', and % rates rising,

the dollar and US securities looking more attractive.

[Yavin4]

12. US Interest rates have risen so the dollar is stronger.

Investors have an alternative to global speculative growth. Also, world governments have grown more and more unstable. It's a flight to safety.