On the first of each month, I share reflections on the market in our private podcast. This enables me to tie together the various threads of our work and connect the dots between what I observe and hear during my travels and interactions with people.
While many of you are podcast buffs, some prefer the magic of the written word. This is an edited transcript of the recording, without my typical writing flair. Here goes:
Stocks are having a strong year, hinting at a soft landing. Meanwhile, bonds and gold are rallying, signaling a potential hard landing. The drop in prices for oil and copper, both sensitive to economic shifts, points to weak global growth. Yet, a weaker dollar implies global growth is steady and financial conditions are loose. So, which signal should we trust?
To keep it simple, if we had to rely on just one piece of information, it would be the dollar. For example, the dollar index peaked at 114.8 on September 28, 2022, and two weeks later, on October 13, the S&P 500 bottomed at 3,492. Since then, the dollar index has dropped 11 percent, while the S&P 500 has climbed 60 percent.
In other words, the dollar’s bear market has coincided w
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