Playing King Dollar
A confluence of events has given new life to the shitbag dollar. We have treasury yields sprinting higher, the Fed talking rate hikes and better than expected GDP growth. Be careful for what you ask for, dollar bulls.
With the dollar gapping higher, it will hurt the earnings of our beloved multi-national corporations. However, there are other ways to profit from this new paradigm.
For example: Indian IT service companies. This sector has been killed, due to rupee strength versus the dollar. It was eating away at their gross margins. Off of a strong dollar, [[INFY]], [[CTSH]] and [[SAY]] should thrive.
The most obvious beneficiary off of a strong dollar is Japan. They are a huge exporter and rely upon favorable exchange rates to bank coin. There are many ways to play Japan. I prefer, [[CAJ]], [[TM]], [[NMR]] and [[EWJ]].
In short, if the fucker exports to the U.S., they will benefit from a strong dollar, providing end user demand remains robust.
Interesting, the DUG is underperforming today - maybe because it ran a couple of days ago or … no one trusts the USO price action today??
May 29th, 2008 at 1:03 pmPut money on a late day sell off. This rally is BS. Plenty of resistance at 12700.
May 29th, 2008 at 1:05 pmDare I say we are still in a bull market with the financial contagion contained? When do we actually entertain that notion?
May 29th, 2008 at 1:08 pmMr. Macro strikes again…nice.
Meanwhile, the 10 day on VSE is a thing of beauty.
WM
May 29th, 2008 at 1:12 pmI still love long TM, short GM and F, although might be time to take some profits on the short side of that trade.
May 29th, 2008 at 1:30 pmAm I the only one who likes TWM here?
May 29th, 2008 at 1:32 pmI think so, but if market continues into midway through next week in it’s uptrend, I’m likely to join you on the short side
May 29th, 2008 at 1:42 pmDollar rallies are all window dressing in relation to oil selling off a smidge….interest rate runs in treasuries only reflect selling for fear of inflation not to get speculative in euqities. Hokus Pokus I say.
May 29th, 2008 at 1:48 pmMGM is acting stupid, marching a straight line after a nice 3% run because the recession is over. The drunk tightrope walker falls before the bell.
May 29th, 2008 at 1:58 pmoil plummet has one more day so better hold off on the master ’sector rotation’ plan before it blows up in anyone’ face.
How can the dollar be strong and the economy weak?
And if the economy is so strong, why isn’t there demand for oil and metals?
Bit of conundrum how you get a weak economy, strong dollar, no inflation…
Everyone who buys DUG is going to be ass raped sooner or later and all you shorties know it. Grab your 70 cents while you can and go buy a doughnut and fuck it.
May 29th, 2008 at 2:03 pm[...] As predicted yesterday, all of the Chinese IT companies are running. Check (INFY: 48.41 +6.72%), (IGTE: 8.39 +1.57%), [...]
May 30th, 2008 at 1:22 pm