Chart of the Day - Wednesday, July 29th, 2020

Today’s Chart of the Day was shared on Twitter by Renaissance Macro Research (@RenMacLLC). Yesterday, we highlighted the US Dollar and the impact that it's having across asset classes. We explained that the recent Dollar weakness has provided a boost to Stocks, Commodities, and even Bitcoin. Focusing on Stocks for today, the chart here shows which industry groups within the S&P 1500 are most sensitive to changes in the US Dollar. Renaissance notes "A positive relationship means the group will decline when the Dollar declines, a negative relationship implies strength when Dollar weakens." Notice that value-oriented and cyclical sectors like Materials and Energy tend to benefit from a weaker Dollar. On the other hand, Growth-oriented sectors like Software, Biotech, and Semiconductors tend to be hurt by a weaker Dollar. In a separate comment, JC Parets summed up the biggest takeaway from this chart - "Looking for sector rotation? Here's your catalyst."