Dollars Bulls Now Owe It to Tight Coupling

I received an email from a reader that contained an interesting fact:

Seven separate assets currently maintain an 85% correlation (or better) with the S&P 500 over the last six months.

Included in that group is Reuters/Jefferies CRB Index, emerging‐market bond spreads, and not surprisingly, the euro. I’ve been consistently discussing the tight correlation between the currencies and stocks. The reason I’ve cited has been simple: as risk ebbs and flows, buying of US dollars ebbs and flows ... in an opposite direction.