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Weak Dollar 'Positive' For These Sectors: Strategist
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CNBC.com Writer
How will the weak dollar affect the stock rally and how should investors be playing the markets? Larry Adam, chief investment strategist at Deutsche Bank Private Wealth Management and Peter Boockvar, equity strategist at Miller Tabak shared their market strategies.
“The weakness in the dollar is supportive,” Adam told CNBC. “At least in the near-term for certain sectors such as technology, energy and materials where they get more than 50 percent of their revenues overseas. I think it’s very positive for those sectors in particular."
Adam added that growth overseas has been better and has led the U.S. in this current cycle.
“We’re not looking for a robust recovery,” he said. “We’re looking for GDP growth next year of 3.2 percent—usually it’s around 5 percent.”
In the meantime, Boockvar said the dollar is weakening because asset inflation is "unofficial government policy."
“We saw that after the tech bubble and we’re seeing it now—to try to inflate our way to better times through a depreciating dollar,” he said. “So we’re depreciating our way to prosperity.”
Boockvar said the best way for investors to protect themselves under that scenario is to take part in the reflation trade by buying hard assets, commodities and the producers of these commodities and staying away from ex-dollar assets.
“If you are selling most of your goods overseas, you are going to benefit,” he said. “[But] we will, at some point, reach a moment in time where foreigners will say ‘Do I want to be investing in the U.S. market?’ and that time will come if you remain on this current path.”
Boockvar Likes:
Gold COMEX (Dec.)
Silver COMEX
S&P Energy
RJ CRB Index
MSCI Emerging Markets
Adam Likes:
S&P Technology
S&P Media
S&P Industrials
S&P Health Care
S&P Energy
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Disclosure:
No immediate information was available for Adam or Boockvar.
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