Larry Kudlow was appointed by President Trump as Director of the National Economic Council, replacing the widely respected Gary Cohn. Kudlow, a former Federal Reserve and Wall Street economist and most recently a television host on financial news network CNBC, has raised some eyebrows with his comments regarding his support for a strong dollar. The dollar has been in a downward trend against a basket of major currencies since the beginning of 2017, although it has strengthened modestly over the past month or so. Weakness may have been more related to economic repair or the regaining of lost ground for the rest of the world versus the US. We view that as positive for the global economy and not necessarily a bad thing for the US. Corporate US fundamentals – most notably earnings growth – are robust and should support securities prices going forward. But, a stronger dollar could place downward pressure on earnings and serve as a headwind.
