Deploy the Playbook
In this week’s stock market review, we review our asset allocation playbook on how to manage assets in a bearish U.S. dollar environment, characterized by rising long-term interest rates, reflation, and accelerating economic growth. We also want to review the ramifications of a sustained decline in technology stock market leadership and what that may or may not mean for under-owned areas of the market such as energy, financials, and materials.
Key Takeaways
- Economic growth continues to reaccelerate on a rate of change basis and the credit markets are SOLID.
- Accelerating growth and higher U.S. fiscal spending is bearish for the dollar and bonds (higher long-term interest rates).
- Lower U.S. dollar, higher growth, and higher interest rates are positive for financial, oil, materials, and select consumer stocks.
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