US Stocks Shake Off Europe

I’ve mentioned a few times that the U.S. stock market has finally disentangled itself from Europe. The problem is that it’s hard to show graphically. Here’s my attempt.

The following three charts show the S&P 500 on the horizontal axis and the euro/dollar exchange rate on the vertical axis. This is for the the months of October, November and January.

In October, you can see how high the correlation is (0.9371). In November, the relationship starts to break down. By January, it’s completely gone. This is a major reason why we’ve been rallying.

Posted by on January 24th, 2012 at 12:36 pm


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