I'm still trying to get my head around the Treasury move on Fannie and Freddie. We know it's a positive for the market but we're trying to quantify the effects on equities. Here's a place-holder story from one of our favorite analysts via Bloomberg:
The dollar may appreciate 5 to 10 percent against the euro in the “near term,” according to Marc Faber, publisher of the “Gloom Boom & Doom” newsletter.
U.S. equities and the dollar may keep rallying together, reversing a relationship that existed from March to November, Faber said in an interview on Bloomberg Television.
“Sentiment on the U.S. dollar was really extremely negative over the last three months,” Hong Kong-based Faber said. “The other currencies are not much better. The dollar will appreciate against the euro by another 5 to 10 percent, and later on we’ll have to see, but that would be a near-term target.”
The dollar has gained 4.2 percent to $1.4405 per euro this month, and was poised to end a five-month losing streak, on signs the U.S. economic recovery is gaining momentum.
Investors need to be “very careful” holding U.S. Treasuries and cash, and U.S. stocks will rally as Federal Reserve Chairman Ben S. Bernanke and his colleagues may have to print more money to help the government finance its debts, said Faber....MORE