129 Mar 2008 14:42
I think its due to the weak dollar :
"If you’re not with me on the bullish dollar stance yet, but are invested in equities, you need to reconsider. Despite conventional wisdom, a weak dollar is NOT beneficial to the stock market. And here’s the proof from the Bespoke Investment Group:
“Since 1967, the dollar has had four up cycles and five down cycles. The average return of the S&P 500 during the four up cycles is a gain of 86.6%, which is over five times the average return of 16.4% during dollar declines.”
So if you want your stocks to go up (by a wide margin), history shows you should also want the dollar to go up.
In short, the dollar might be traded like funny money right now, but it won’t last forever. In the near-term, I do expect more pressure to the downside, but a turn is coming. The fact that the dollar didn’t utterly collapse when the Fed cut interest rates 125 basis points in eight days only strengthens my conviction here.
And rest assured, when the dollar bears turn into dollar bulls, the change will come swiftly"
(Thats part of an email i recieved.)