Home advantage? Why investors may want to avoid the international trade
Kim Arthur, CEO of Main Management, believes that the weakening dollar will have a significant impact on global markets.
The U.S. Dollar Index hit a low of 15 months on Friday.
Investors might want to reduce their international exposure and focus on the domestic market.
Kim Arthur, CEO of Main Management, believes that the weakening dollar will have a significant impact on global markets.
Arthur said on CNBC's "
ETF Edge
This week. From 2011 to 2022 the dollar was on a bullish trend, so international stocks were going to be a loser no matter what.
On Friday, the
U.S. dollar index
It has reached a low of 15 months. This comes around 10 months after the 10-year high.
"The dollar was at its highest in September last year, okay?" You really need to know where you think the dollar will go. "We personally believe the dollar will continue to fall," said Arthur.
Arthur, former head of Bank of America’s Institutional Sales and Trading Department, believes that the dollar will return to a stronger period.
We are far ahead of other countries in the fight against inflation. Our inflation figures are lower than those of the rest. "Our interest rates are higher in comparison to the rest of world", said Arthur. What does that mean?" This is a great setup for us to cut rates ahead of the rest. This differential will lead to a stronger US dollar."
ETF Action Founding Partners Mike Akins and John McKinney cite another market dynamic which could harm global stocks - the strong appetite of U.S. technology mega-cap stocks.
"You continue to see a steady increase in the flow of money into U.S. stock. There is very little money going to the international market. Akins stated that this kind of thing just happens. I'm not certain what is the catalyst, but it must start with these big names.
Microsoft
,
Apple
,
Amazon
,
Tesla
Now
Google [Alphabet].
Those names are the ones that are driving this expansion of S&P 500 as a whole because they represent such a high percentage. "That's where we will need to find the catalysts to bring back value, international [and] emerging."
As of Friday, the
iShares MSCI Emerging Markets Fund
This year, the is up by 8%. The
S&P 500
The increase is 17%.