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Strong Stock Market Bad for Dollar/Bonds?

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  • Tue, Mar 24, 2009 - 03:39am



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    Strong Stock Market Bad for Dollar/Bonds?

When the stock market was tanking hard, many were taken by surprise at the strength of the dollar.  The explanation seems to be that this was some sort of combination of having to settle accounts in dollars, and buying bonds and holding cash.  Right?  And bonds benefited too (many say a bubble formed) as people "flocked" to the "safe haven" and infamously drove down the T-bill yield to something like 0%.

So if the stock market should rebound to 9 or 10k on the Dow, would we expect weakening of the dollar and weakening of bond prices?

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