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The siren song of dollar weakness

A weaker dollar seems to be the answer to everyone’s prayers at the moment—or more specifically, investors want exposure to the exceptionalism of U.S. capital markets without the currency exposure that comes with it. From the BIS, via FXStreet:

Many investors still want to remain invested in US equities (belief in US exceptionalism is alive and well!), but at the same time, they see growing risks for the US dollar, not least due to the US government’s attacks on the Federal Reserve. A significant depreciation of the dollar could reduce the returns on the actual equity investment or even wipe them out entirely. So what is the solution? Hedging against dollar weakness. Ultimately, these hedges are effectively bets on a weaker US currency and, if widely adopted, create selling pressure on the dollar."

Equity Sector Rotation Chartbook, September 2025 - Running hot, and narrow

The September 2025 edition of the S&P 500 equity sector rotation chartbook can be found here. You can read more about the methodology and underlying assets here. This chartbook has been prepared with 1y total return, which is a departure from the first version with six-month returns. I honestly didn’t think about this when I pulled the data from Investing.com, as I normally work with 1y total return data for portfolio construction and the like. This shouldn’t make a huge difference to the main conclusions, though in some cases it might obviously shift the sectors around in the key diagram, compared to a six-month return framework. If you have a preference for future versions of this chartbook, let me know.

AI, Markets and Trading, Corporate Financeclaus vistesenSeptember 27, 2025equities, equity rotation, chartbooks

Equity sector rotation chartbook Aug 2025 - Order is restored, for now

As I wait for the September update of the OECD leading indicators—producing data for July and August—I thought I’d introduce another chartbook I've been working on, this time focused on equity sectors. It replicates a variation of a Bloomberg function I used to rely on when I had access to a terminal, the Relative Rotation Graphs - RRG. Since transitioning to Macrobond as the main source of data in my day job, I no longer look at this tool as frequently as I’d like. To that end, I’ve built my own version using the SPDR S&P 500 sector ETFs, and the SPY along with the VEU, to capture the relative performance of sectors and global equities. The total return data comes from Investing.com, where I have a personal premium subscription.

Markets and Tradingclaus vistesenAugust 31, 2025equities, equity sectors, chartbooks

Global Leading Indicators, June 2025 - What Tariffs?

The June 2025 edition of the global LEI chartbook can be found here. Additional details on the methodology are available here.

Global leading indicators improved further at the end of Q2, as markets and decision-makers in the real economy concluded that Mr. Trump’s tariff threats are more bark than bite. However, the U.S. President has since rekindled his appetite for tariffs, unveiling several high-profile measures targeting Asian economies, along with the weekend bombshell of a 30% tariff on imports from Mexico and Europe.

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