What's going on?

US stocks closed at a new record high on Thursday (tweet this)! All that concern from last week seems to have evaporated…

What does this mean?

Last week, markets suffered through a mini-shock as investors appeared to be getting anxious over the ability of President Trump�s administration to push through its pro-growth initiatives (like tax reform). But that concern appears to have been left by the wayside � US stocks gained almost 0.5% on Thursday to decisively �break through� to a new all-time high (they had come close to breaking through numerous times in recent months).

Why should I care?

The bigger picture: The weaker dollar probably has something to do with it.

Yes, US stocks are at an all-time high, but the US dollar has fallen almost 5% this year versus other major currencies. The weaker dollar helps US stocks partly because lots of US companies make money internationally � and when the dollar weakens, that overseas income is worth more when it�s translated back to dollars (and, so, boosts their US dollar-denominated stock prices). So, the gains for US stocks are not quite what they seem because internationally-orientated investors have to offset their losses from the declining value of the dollar against their stock market gains.


For markets: Strong performance leads to greater confidence in the market… which can lead to even stronger performance.

If your neighbor is having a fantastic party, you�re more likely to pop over for at least �a drink�. �Similarly, potential investors that are sitting on the sidelines, watching others have all the fun, are going to be tempted to invest in stocks. That can create a sort of snowball effect that pushes up stocks even further. Of course, at some stage, too many people get too confident � but apparently that�s a problem for another day! (Note: a consistent investment strategy that neither gets too confident nor too pessimistic is usually recommended!).