Issue link: http://www.insightdigital.biz/i/563465
44 | I NSIGH T • S e p t e m b e r 2 0 15 w w w . i n s i g h t o n b u s i n e s s . c o m H ow strong is your dollar? Or in other words, how much "stuff " can your dollar buy? is question is increasingly important since currency manipulation is a common tool used to help manipulators gain an edge over other countries when economies underperform. So how does currency manipulation effect the U.S. economy and markets? First, let's take a look at China. is past summer, Chinese markets saw a huge market selloff, with the Shanghai composite declining more than 23 percent. e selloff was accompanied by underwhelming economic data and fears of slowing Chinese growth. So what is China to do when markets drop and economic numbers sour? Devalue currency, of course! And that's exactly what the Chinese central bank did in August. Currency devaluation effectively makes Chinese goods easier for foreigners to buy since foreign currency, like the U.S. dollar, has more purchasing power. is might be good news for the Chinese economy, but it is not welcomed news for a struggling U.S. economy. For example, we've seen shares of Apple Inc. drop over 13 percent in recent weeks partly because of China's currency devaluation. Apple relies on Chinese consumers to buy its products, but since the Yuan is worth less, it is now more expensive for those consumers to buy Apple products and more difficult for Apple to sell its products. Unfortunately, this is the same story with many U.S. companies doing business in China. Another challenge the U.S. faces because of the currency issue is the Federal Reserve's timing of interest rate hikes. Since rate hikes in and of themselves can strengthen the dollar, the Fed risks constraining economic growth with rate changes. clearTREND research produced by Appleton Group indicates downward trends in most market segments except the S & P 500 index, large growth companies and real estate. Its U.S. Economic Health Index shows that 42 percent of U.S. sectors are expanding while 45 percent are contracting. "Lackluster U.S. economic data, a slowing Chinese economy and currency wars are just some of the things affecting markets", says Alexander Hunt, advisor to private clients and retirement plans. "Nobody knows if recent deterioration signals a market top or if this is just another hiccup in a long bull market. It's too early to tell." KEY: = uptrend = downtrend Ticker = trading symbol (individual securities only) Trend Began = date on which current trend was identified Confidence = clearTREND's historic success rate in generating capital gains based on accurate trend identification clearTREND U.S. Economic Health Index: trending i n fo c u s Currency woes, strong dollar hamper the markets Currency wars This index measures more than 130 unique U.S. market sectors to determine how many are expanding, stable or contracting. More than 50 percent of expanding sectors are healthy, while less than 50 percent are not. 42% Expanding: 42% Neutral: 13% Contracting: 45% Poor Fair Good Excellent 100% 42% 13% 45% Data as of 8/14/2015 Sector Focus: Higher Education Description Ticker Trend Began Confidence Apollo Education Group Inc. APOL 4/16/15 71.05% Capella Education Company CPLA 7/21/15 81.40% Chegg Inc. CHGG 1/5/15 99.00% DeVry Education Group Inc. DV 8/6/15 76.76% Graham Holdings Company GHC 7/2/15 99.00% Grand Canyon Education, Inc. LOPE 6/3/15 88.89% Houghton Mifflin Harcourt Company HMHC 8/4/15 99.00% Strayer Education Inc. STRA 8/4/15 76.42% Human Resources: Sports Tourism/Conventions Description Ticker Trend Began Confidence Black Diamond Inc. BDE 3/11/15 77.36% Cabela's Incorporated CAB 7/17/15 74.63% Callaway Golf Company ELY 8/13/15 75.98% Compass Diversified Holdings CODI 3/25/15 82.54% Hilton Worldwide Holdings Inc. HLT 6/18/15 99.00% International Speedway Corporation ISCA 3/30/15 83.72% Las Vegas Sands Corp. LVS 8/7/15 78.13% The Walt Disney Company DIS 11/6/14 75.09%