Dollar Break Imminent as Stock Market Splits
The US dollar could break by October 7, according to Market Wizard Larry Benedict, not just weaken or slip in value. This would put bonds, cash savings, and even dollars in pockets at risk. Benedict will hold an emergency briefing on September 30 to discuss what's happening and how to protect oneself.
Meanwhile, the stock market shows signs of a split between indexes and individual stocks. The S&P 500 closed near its all-time high last Friday, but nearly half of the tracked stocks are in bear market territory, with tech stocks being particularly affected at 69%. This contrasts with the indexes' performance, which is driven by a handful of mega-caps.
Looking deeper into the numbers, bond yields have surged to their highest levels since 2007 and 2004 for the 10-year and 30-year Treasuries respectively. This has led to investors selling traditional bonds in favor of higher-yielding assets, such as technology stocks. Even within tech, a split market is evident with mega-cap stocks performing better than micro-caps.
Financials show an unusual pattern, with the healthiest breadth but still taking significant outflows. Meanwhile, energy and hotels/leisure stocks have seen zero inflows despite higher oil prices and gas costs.