5 Day Dollar Bounce Hurting Commodities, Gold, and Equities (GDX, UUP, CRBQ)
The inverse relationship between the US Dollar and the equity market continued to be a major driver of markets over the past 5 days.
While the PowerShares US Dollar Bullish ETF (NYSE: UUP) is up slightly over 1% since Wednesday, the S&P 500 is down 2.5%.
One can see the high inverse correlation of the US Dollar and equities over the past 5 days in the above chart.
Commodity and gold ETFs were hit to an even greater extent. The Jeffries Global Commodity Equity ETF (NYSE: CRBQ) is down 3.4% and The Market Vectors Gold Miners ETF (NYSE: GDX) lost 6.4% over the same period.
As long as the inverse relationship continues, owning commodity/gold equities is owning high beta (recently around 2+). Usually investors hold commodities/gold as a hedge to insulate in market downturns, however right now they are moving with equities in an exaggerated fashion.
