Nice chart from Gary S. Morrow, showing the dollar moving away from strong resistance, which is happening just in time for the seasonal rally in the fourth quarter, for the .
The DXY () and UUP (Invesco Dollar Bullish Fund) are lower today due to the weaker US payroll report.
As the chart shows, there has been a strong dollar rally over the past three months, starting around the time the SP 500 peaked in late July 2023, and it also looks as if the dollar peaked just as the SP 500 tested support near 4,150 – 4,175.
The DXY and UUP peaked in late September and early October 2022 and despite this rally in late 2023, they are still lower than a year ago.
Open positions:
: Oakmark Int’l was outperforming the SP 500 as of July 31, 2023, with a lead of approximately 200 bps, more than 22% versus the SP 500’s +20% year-to-date gain as of July 31, 2023, but He has since renounced all that. alpha and then some, closing last week with a year-to-date return of 1.13%. David Herro’s fund has always been known for its volatility, and the last 90 days have not disappointed, but if the seasonal rally is here, Treasury yields cooperate and the dollar weakens, Oakmark International is expected to close the gap on the SP 500 once. again. (That’s not a prediction.) Oakmark Int’l is a top 10 customer and has been for the past few years.
Emerging Markets Ex-China (NASDAQ:): EMXC is up about 14% year-to-date as of July 31, but as of last Friday, its year-to-date performance had dropped to just over 2%. Emerging markets are lagging international funds overall, and simply haven’t been a good place to be over the last 10-15 years, with the SPDR EM ETF returning just 3.01% over the last 5 years and 2.17% in the last 5 years. 10 years. (See attached spreadsheet with annual returns.)
Vanguard Developed Markets Index Fund ETF Shares (NYSE:): Although it is a “developed market” index, its performance this year has correlated fairly closely with the EMXC, probably because everyone is feeling/experiencing higher interest rates.
The fourth largest non-US or international position is an international stock fund that will not be named because I’m not sure how long it will be around.
Annual returns:
International 3-, 5-, and 10-year annual returns for this asset class remain “meh.”
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Take all of this as one opinion and past performance is no guarantee of future results. Capital markets change rapidly, both for better and worse. Future earnings and EPS data will change after Thursday night’s earnings release. Information may or may not be up to date here.
