As we warned that it would, the strong U.S. dollar is posing a triple threat to U.S. earnings. Here is a direct video link.
Most importantly for stock prices, this is coming at a time when S&P earnings have been above trend for the past 4 years (not because of robust sales but mostly because of cost cuts in the 2008 recession and because corporations have been spending 90%+ of their net income to buy back their own shares to prop up earnings). As we saw at all previous cycle peaks and most recently in 2000 and 2008: mean reversion in earnings is inevitable and hard on over-valued investment markets.
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