Crappy Days are Here Again
The financial news media is making a big deal of the fact the US stock market just finished its strongest month in over a year and the strongest September since 1939. The current ‘Breaking News’ story on CNN.com touts that “Despite the stomach churning month, stocks ended September with strong gains. The Dow jumped more than 7%, the S&P rose more than 8% and the Nasdaq has climbed more than 12%.”
What these stories are leaving out, though, is that in month of September, the dollar fell 7% (versus the Euro). It makes sense that, if the dollar is 7% weaker, it will take 7% more of them to buy a share of a given stock. So, to those who take this month’s performance as a sign of a thaw in the Kondratieff Winter, just keep in mind: September 1939 wasn’t much to cheer about, in the grand scheme of things, now was it?