The market is roaring just as the U.S. Dollar Index (DXY) has been in a free-fall.  There are numerous factors that go into the movement of currencies, including the dollar. There are also a lot of theories on whether the U.S. dollar should be weak or strong, and most would agree when it gets too weak or too strong. I think conventional wisdom coming into 2017 was that the dollar was too strong. While it helps with the purchasing power of Main Street, it will hurt the bottom line of companies that drive the stock market.

Now, there is a fair amount of hand-wringing on the other end of the spectrum as the dollar nears critical support points. There is support for the DXY around 94.00 - if 92.50 doesn’t hold, it could tumble to 85.

Confidence Begets Confidence

I stopped taking stock in polls a long time ago, but there are times when you can strip out the political noise to find a modicum of truth and that happens often with economic polls (although they’re still skewed along party lines). Recently, CBS posted its poll on Views of the Nation’s Economy - the  “ % of Americans say the economy is good.”

• 64%: June 2017
• 56%: September 2016
• 5%: February 2009

Confidence is infectious, and it creates the foundation for success that generates even more confidence.  It doesn’t get derailed by day-to-day shenanigans in Washington, D.C., but it can eventually be bogged down and arrested with long-term ineptitude. On that note, Americans are watching the health care saga very closely, according to Bloomberg.

Where There’s a Will...

I know that soaring premiums after years of lost health coverage made this a key issue in November, but there is much debate on what to do now. The fact is that with political will, repealing it would be best for the long-term, but now Republicans seem even afraid of taking that route. After the closing bell on Wednesday, the Congressional Budget Office (CBO) released its “score” on the repeal only and it’s not pretty.

CBO Scores ‘Repeal’ Only

• Deficit -$473 billion 2017 - 2026
• Uninsured -17m 2018 -27m 2020 -32m 2026
• Premiums +50% 2020 +100% 2026

If the repeal fails and a new replacement bill can’t be crafted, it’s going to be imperative that Congress get a tax bill done.  This means they should begin with lower taxes and maybe a couple repatriation and infrastructure. This allows room for negotiation and real compromises.

I suspect most Americans believe that health care and taxes are going to be adjusted. Meanwhile, regulations are being wiped away.

Overvalued…Right?

Once again, technology rocks; as of now, it has many harkening back to the late 1990s, when the tech boom was all the rage until it went off the rails. It’s easy to look at the latest spike in the S&P Financial (XLK) and guess it’s over its skis. If we use a 20- year chart to see technology, it’s not even at an all-time high.  And if it gets to a new high this time, it will be a lot different.

This time, there will be billions in cash and a true economic impact, underpinning the milestone rather than business plans written on the back of a napkin.  True valuation is about the future; looking back, this rally actually feels late.

Today's Session

The Euro has jumped 0.5% triggered by Draghi's comment that ECB will discuss how they will proceed with its QE (quantitative easing) program and that the Eurozone is finally experiencing a robust recovery. European indices are also bullish after ECB leaver interest rates unchanged.

In the US, weekly jobless claims plummet to an almost five-month low to 15,000 to 233,000 for the week ended in July 15.  Futures are in green, and it seems to be another rally for the market. 

Let's see how things go this morning.