This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Threatening Yen

Stocks in this article: FXY UUP RSP SPR DBP

NEW YORK ( TheStreet) -- The yen fell below the 100 level on Thursday relative to the U.S., dollar. That has been the plan of Abenomics all along, and traders are finally favoring the dollar.

The chart below compares CurrencyShares Japanese Yen Trust (FXY) over DB USD Index Bullish (UUP). That simply puts the movements of the U.S. dollar over those of the yen.

The pair broke out of a multi-month sideways trend, and appear to be headed higher. Japan ran a trade surplus in March higher than at any point over the past year. Japanese Prime Minister Shinzo Abe's plan seems to be working, but at the expense of surrounding economies.

Export heavy countries surrounding Japan, most notably South Korea and Australia, see what Japan is doing as a currency war. Both cut their cash rates this week to make their currencies more competitive. As much as Japan wants to believe it is not engaging in monetary combat, other central banks don't agree.


The next pair is of S&P Equal Weight ETF (RSP) over SPDR S&P 500 (SPY). This pair shows how wide ranging the current rally is.

Short sellers have surrounded weak stocks this earnings season, but betting against equities has been a fruitless endeavor. Short selling hedge funds are down 7.5% year to date, and the truism, "Don't fight the Fed," looks to be in full effect.

Low interest rates have kept equities an attractive investment, and have cast a far reaching net across the asset class. The breadth, or level of participation in the market, has been high during the upswing in equities, and the trend isn't faltering just yet.

The last pair is of DB Precious Metals Fund (DBP) over an equal weight DB Commodity Index Tracking Fund (DBC). This pair measures a basket of precious metals over a basket of equal-weight commodities in order to determine relative strength of the sector.

The chart below shows that precious metals had a steep sell-off a few weeks ago and then a consolidation period. Now precious metals appear to be returning to their downtrend.

Equities are pushing higher, which makes precious metals less attractive, as well as the dollar showing strength with a weak yen. The strength of the dollar pushes commodities priced in dollar terms down, and precious metals are no exception.

At the time of publication the author had no position in any of the funds mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Andrew Sachais' focus is on analyzing markets with global macro-based strategies. Sachais is a chief investment strategist and portfolio manager at the start-up fund, Satch Kapital Investments. The fund uses ETF's traded on the U.S. stock market to gain exposure to both domestic and foreign assets. His strategy takes into consideration global equity, commodity, currency and debt markets. Sachais is a senior at Georgetown University earning a degree in Economics.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs