Market Mover: It's the Dollar (And/Or Bernanke)

Headline Alert

Market Mover: Looks Like It’s the Dollar (And/Or Bernanke)

Stocks have now given up all of the early gains and have moved into negative territory. There is no market-moving news or any ‘analyst catalyst’ to justify the dive of more than 170 points on the Dow.

However, it does appear that it is the rally in the dollar that is the culprit for the reversal.

Recall that last month stocks were inversely joined at the hip to the moves in the dollar. Thus, the ongoing rally today looks to have reestablished this trade among the fast-money crowd running programs.

In response to the surge in the greenback, material and commodity stocks are being sold with reckless abandon as traders may fear the unwind of the dollar-carry trade.

Another issue that could be affecting traders desire to lean on the sell button could be the concern that the Fed is shifting its stance. As we discussed in today’s Daily State of the Markets Report and yesterday’s Top Story there is a decent chance that the FOMC is in the process of communicating that they are looking to hike rates much sooner than the market expects.

 

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