Dollar Weakens Further, Creating Global Oppurtunities

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Technology & Financials

Technology shares were weaker again today, with Technology Select Sector SPDR ETF (XLK) falling by 50 bps, while the Financials Select SPDR ETF (XLF) rose by 80 bps. The rotation in the market continues with the theme, rotate out of Tech, reaching into different parts of the market. With Biotech being the recipient a few weeks back, and now it appears to be the Financials turn.
XLF Price Chart

XLF Price data by YCharts


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Dollar

With the Dollar continuing to weaken one has to wonder at what point money will begin to flow into the material group. The Materials Select Sector SPDR (XLB) has had a decent year, down slightly versus the S&P 500, but significantly underperformed the S&P 500.
XLF Chart

XLF data by YCharts

The Dollar index closed lower again today, and now sits at 92.94, and is down nearly 10 percent on the year. A weakening Dollar has a ripple effect globally, making US based multinational and the emerging markets (EEM) more attractive. Meanwhile, a weak Dollar makes the Yen strong and hurts Japanese equities and European multinational less competitivity.
^DXY Chart

^DXY data by YCharts

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Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.