Reuters reported early this morning…
Market rises on profit reports, consumer data eyed
NEW YORK, April 26 (Reuters) – Solid earnings from big U.S. companies such as Ford, 3M Co and United Parcel Service lifted stocks on Tuesday, but investors braced for a report on consumer confidence amid concerns about the recent rise in oil prices.
Corporate earnings have been generally strong so far this season, with around three-quarters of S&P 500 companies beating analysts’ forecasts so far. That has helped push the Dow industrials up to near three-year highs.
… but the more likely culprit was,
Dollar hits 3-year low before Fed, Asia stocks up
(Reuters) – The U.S. dollar plumbed a near 3-year low against other major currencies on Wednesday before a Federal Reserve decision where it is expected to reinforce its ultra-easy policy stance while stocks in Asia’s developed markets rose, tracking a strong close on Wall Street.
Market players added bearish dollar bets, especially against the euro and the Swiss Franc on expectations the Fed will cling to a near-zero interest rate policy even as it lets a $600 billion (363 billion pound) bond purchase program wind down in June.
“Focus will be on the inaugural press conference and whether Bernanke is shifting along the dove-hawk scale,” said Michael Sneyd, analyst at Societe Generale.
“Attention will also be on comments for how the Fed may respond to U.S. fiscal tightening. All-in-all, the meeting is likely to give the green light for risk appetite and for dollar bears to continue to be bearish.”
The dollar index .DXY, which tracks its performance against a basket of major currencies, hit the lowest since August 2008 at 73.483, before cutting some losses in early Asian trading.
Shares rose, taking a leaf from the robust gains posted by U.S. indices overnight, which was helped by better than expected performances from Ford Motor Co (F.N), 3M Co (MMM.N) and United Parcel Services Inc (UPS.N). .N
Why? It’s just math. Take a look at today’s correlation matrix:
Ticker symbols colored bright red were moving together to the upside, while $SPX, EFA, HYG, IWM, QQQ, IYR, EEM and USO were colored blue on the last line of the chart. They were simply moving opposite to the Dollar.
So, thank The Toxic Avenger for today’s blessings.