The Markets:

Volatility increased for stocks last week, but after all was said and done, the Dow only dropped .96% while the S&P 500 gave up 1.37%.  Interest rates eased slightly, with the yield for the 10 year U.S. Treasury falling .05 to end the week at 2.54%.  (MarketWatch, U.S. Treasury)

King Dollar Reclaims the Throne

Recently, the dollar has been surging against a number of major currencies, and the term “King Dollar” is once again being bantered about with increasing frequency.

As the week came to a close, the Dollar Index⁶, which is a weighted average of the currencies of major U.S. trading partners, rose to its highest level since July 2010.  The difference between the 10-year Treasury yield and its German counterpart is at its highest level in 15 years (Reuters)

Economic ramifications

There are concerns in some corners that a stronger dollar will put U.S. exporters at a disadvantage. It’s true that a stronger local currency typically makes exports less competitive, and it can make it more difficult for U.S. firms to raise prices amid a flood of cheaper imports.  However, U.S. consumers benefit from lower inflation at home and find their dollar goes further when traveling overseas.

We will be sending out our third quarter review and outlook later in the week with more details.

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.

 

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¹ The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly.  Past performance does not guarantee future results.

³ The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly.  Past performance does not guarantee future results.

⁶ The Dollar Index is an unmanaged index that is made up of a weighted average of the currencies of the major U.S. trading partners. The index cannot be invested into directly. Past performance does not guarantee future results.