A falling U.S. dollar is getting a lot of attention from stock-market investors, and according to the chart below from Wells Fargo Investment Institute, the focus isn’t misplaced.
The chart sums up how the stock market and a variety of sectors have performed during past episodes of dollar weakness stretching back to 1988. As noted previously, the dollar’s long-term correlation with the S&P 500 SPX is somewhat negative, meaning that equities tend to rise as the dollar falls — though there are exceptions.
Dollar weakness has generally been seen as a positive, in particular, for shares of companies, typically large-cap multinationals, who derive a larger share of their revenues overseas.
