The “Everything” Rally Rolls On
Financial markets flashed a rare signal that hasn’t been seen in three years, and it’s a bullish signal.
In short, “everything” is rallying higher in unison, according to a recent article from Bloomberg. U.S. stocks, government bonds, corporate bonds, junk bonds, gold, real estate…
You name it and the market is moving higher.
In fact, it’s the first time all these asset classes have moved higher in unison since mid-2016.
But What Happened Next?
That “everything” rally, coming after a sharp stock market correction in 2015–16, kept rolling along. In fact, after that last signal in 2016, the S&P 500 index went on to soar 40% over the next year and a half!
Everything is in rally mode except for one notable exception. As I mentioned in a recent Wealth Watch article, the U.S. dollar is trending down because the prospect for lower interest rates from the Fed saps a currency’s strength.
The flip side of the dollar downtrend is stronger commodity prices and higher stock and bond prices in emerging markets.
Gold, for example, broke out of a six-year trading range to the upside, notching new highs above $1,400 an ounce for the first time since 2014.
With the Dollar Down…These Assets Will Rise
If the dollar continues breaking bad, expect higher gold and oil prices, along with most other global commodities.
A lower buck would also provide a big lift to U.S. multinational stocks like industrials, materials, energy and even consumer goods makers.
All of which suffered drops in share value due to trade war fears.
And that would most likely propel the Dow and S&P 500 to even higher highs.
Stay invested or regret it later!
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch