Futures rose this morning after a strong U.S. jobs report – but made a U-turn less than an hour later. Steve Massocca – co-CEO and head of equity trading at Pacific Growth Equities – blamed the dip on the declining dollar. The greenback has been trending downward for a while now, he says, but people are just starting to pay attention. Massocca called it “quite concerning” and said the weak dollar is “the one big negative that’s out there right now.”
In an interview with Mark Haines and Erin Burnett on “Squawk on the Street,” Massocca called the decline interest-rate driven and outlined a scenario where the Fed could be trapped in economic no man’s land. The U.S. central bank would be forced to defend the currency if the economy continues to weaken, making a rate ease difficult. An ease in rates would be the most likely course for giving the markets a boost.
Here’s Massocca’s take on the near term: “This thing have been creeping along and then it hits, who knows? I think you gotta have your finger on the trigger here, and if things get nasty, you gotta be quick to sell. But I just don’t know if I would jump in there right now.”
The U.S. Dollar Index is down 27 cents to $82.53 today.