2022-07: Strength of US Dollar

As of 2022-07-18, for 2 day ahead prediction, the most important predictors for 5-, 10-, 20-, 30-Year US Real Interest Rates are

• Pfizer PFE (pharma)

• GBP/USD (currency)

• Home Depot HD (consumer)

• Moderna MRNA (pharma)

Real Interest is the nominal interest rate minus market-expected inflation. On FRED, one could find data for US Real Interest Rates under the title of “nn-Year Treasury Inflation-Indexed Security”.

On the side of equity, the most important predictive factors driving QQQ, SPY, DIA for 2 day ahead prediction are

• Moderna MRNA (pharma)

• Bank of America BAC (financials)

• KLA Corp KLAC (industrial, semiconductor)

GBP is at historic low vs USD, aka USD is of highest strength at the moment.

The strength of USD is exerting pressure: Home Depot HD, KLA Corp KLAC were generally always up and only pulled back to 2021 level recently. Both are at reasonable Price/Earning ratio level circa 16-18.