Today's Strange Brew

The Dollar Index is at its lowest level since December; what does it mean?

It's a strange day-the dollar is usually inversely correlated to the stock market-that is, on days when the dollar is weak, equities and commodities usually get a lift.

That isn't happening today. What's up?

There are two broad trends:

1) investors are moving out of dollar-denominated deposits and investing overseas, and

2) investors are looking for higher-yielding investments in general, many of which are outside the U.S.

But the more immediate story is that Standard and Poor’s cut its outlook for debt in the U.K. to negative for the first time, so the U.K. now joins Portugal, Spain, Greece and Ireland with a negative outlook.

Bill Gross of PIMCOhas broadened these concerns by openly speculating that the U.S. could eventually lose its AAA credit rating.

But why is EVERYTHING down today? Why are stocks, commodities AND the dollar down? "Markets don't want to hold U.S. assets," PIMCO's Bill Gross said on our air.

Financials: the big guys trade apart from the regionals. We haven't seen this in a while--regional banks like Huntington Bancshares, Regions Financial, Fifth Third,and Zionsare down double digits, while the bigger guys like Citi,Wells Fargo, JP Morgan, and Morgan Stanleyare down fractionally.

What's up? Here's what one professional bank trader told me: "the regionals dont have the type of revenues that JPM, WFC, BAC, and brokers have. We are seeing the strong act well and the weak players (deep regionals) not acting well."




Questions? Comments?