[MRM]

There are a lot of factors at play, but here are the edited highlights. The large US stocks that make up the industrial averages are all multinational complainies that are based in the US so their currency is the US Dollar. When the dollar goes down it makes their products more competitive in the rest of the world. As a result, US-based multinationals are seeing bigger than expected earnings because of the exchange rate. A few months ago the same companies were still growing because they have large exposure to the US market that prices in dollars, but they faced huge headwinds trying to sell into foreign markets with a rising dollar. This quarter brings the trifecta of good US economic demand, growing ROW demand, and a falling US Dollar.

The Dollar is declining because we have low interest rates, we are perceived to be poised for tax and regulatory reform, and the Dollar has had a heyday against the Euro and other foreign currencies simply because those economies were basket cases. Now that they're stronger it's safer to put money in those countries, which lowers demand for the USD. All in all it's a good thing.