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Traders Fail to Capitalize on Weak US Dollar


Today's financial recap and tomorrow's financial outlook.

On Friday, the US dollar ended its worst week since 2009 as traders digested the Fed's surprisingly dovish monetary policy stance, and the slump extended today.

The dollar fell 1.3% against the euro and 0.3% against the yen.

The strong US dollar has taken a significant toll on corporate earnings of multinational companies, so its recent drop has been a tailwind for stocks.

The falling dollar is also having a favorable impact on commodities prices and stocks, with crude oil, gold, and silver all posting gains.

However, equity traders were unable to extend Friday's huge rally as the S&P 500 fell 0.2% to 2104.42.

Crude oil initially dropped this morning after Saudia Arabia said it would maintain production levels, but nonetheless, crude oil started stampeding higher at 2:00 p.m. ET in reaction to the dollar's ascent. Crude oil prices rose 1.6% to $47.32 today.

Gold miners were among the day's top performers, with the Market Vectors Gold Miners ETF (GDX) returning 2.2%. The Market Vectors Junior Gold Miners ETF (GDXJ) did even better with a 2.9% gain.

Biotech stocks were weak again. The sector shot up to record highs early Friday but sold off quickly, and the weakness extended today.  The iShares Nasdaq Biotechnology ETF (IBB) fell 2.3% to 358.28, making it the worst-performing major ETF.

Market leader Apple (AAPL) rose 1.0% to $127.21 after Cantor Fitzgerald raised its target price to $180 from $160. That target price, which is the highest on Wall Street according to Bloomberg, implies a market cap over $1 trillion.

In keeping with the recent trend, economic data was disappointing today. The February Chicago Fed National Activity Index and Exisitng Homes Sales reports were both below expectations.

Overseas, the Shanghai Composite rose 1.95% despite the China Securities Regulatory Commission warning investors that they "should be cautious about market risks."

Tomorrow's Financial Outlook

Traders will be intensely focused on the February CPI report, which will be released at 8:30 a.m.

While the Fed has made clear it will maintain a dovish monetary policy, historically, this report has tended to drive a fair amount of market volatility.

The FHFA House Price Index, Markit US Manufacturing PMI, New Home Sales, and Richmond Fed Manufacturing Index reports will also be released.

Twitter: @T3Live
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