One of the big postelection gainers could soon stall out, Fundstrat warns

The U.S. dollar could soon see a sharp reversal from its postelection gains, according to Fundstrat. The dollar index, which measures the U.S. currency’s performance against six rival currencies, including the euro and the yen, is up more than 3% since President-elect Donald Trump secured a second term. It’s also trading above 106, near levels not seen since November 2023, and is headed for a seventh straight weekly gain — a feat not seen in more than a year. That move comes as investors assess the potential macroeconomic policies likely coming in a second Trump administration, particularly on tariffs and trade. Trump has floated the idea of a universal tariff on all imports, and especially high levies on goods from China. .DXY YTD mountain Dollar index in 2024 But Mark Newton, technical strategist at Fundstrat, thinks the greenback “stalls out and reverses in the weeks ahead.” He cited three factors for this call: Resistance around the 107 level, which has not been reached in a while, suggests a pullback is nearing “Counter-trend Exhaustion per DeMark indicators could line up on [a] daily and weekly basis in unison as of next week,” Newton said. Bearish seasonal trends: the dollar has “historically reversed sharp rallies into November, and December stands out as the most bearish month of the year” for the dollar index, the strategist said. Bottom line: The postelection dollar bounce may be short-lived, if Newton is correct. Elsewhere on Wall Street this morning, Piper Sandler upgraded Campbell Soup to overweight from neutral, citing upside to its Rao’s sauce business. “We consider CPB one of the better-positioned large cap food names,” Piper Sandler said. “Continued strong growth [is] expected” for the Rao’s brand. And while “Rao’s tomato sauces are imported from Italy, we continue to expect tariff risk on food to be low,” Piper Sandler added.