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The S&P 500 Index Saw Slight Improvement in April: What's Next?

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Part 5
The S&P 500 Index Saw Slight Improvement in April: What's Next? PART 5 OF 7

How the Weaker Dollar Boosted the Material Sector in April

Material sector

The Materials Select Sector SPDR ETF (XLB), which tracks the performance of the material sector, showed an improved performance in April 2017. It rose nearly 1.6% during the month. Dow Chemical (DOW), Monsanto (MON), Praxair (PX), and Ecolab (ECL) returned -0.4%, 2.3%, 5.9%, and 2.5%, respectively, in April 2017.

How the Weaker Dollar Boosted the Material Sector in April

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The stronger dollar (UUP) hampers the performance of the material sector, as it hurts exports. On the other hand, the weaker dollar is a good sign for exports. The dollar index fell nearly 1.5% in April 2017, which helped the material sector.

The dollar has shown some weakness in the past two months. The Trump administration’s delay in implementing policy reformation is weighing on the dollar index. Some economic indicators are also falling, which is worrying some investors.

Material sector as compared to broader market

The broader market S&P 500 Index rose nearly 1.4% in April 2017, and the material sector rose 1.6% in the same month. The Dow Jones Industrial Average (DIA) and the Nasdaq Composite (COMP-INDEX) returned nearly 1.3% and 2.2%, respectively, in April 2017.

You may be interested to read, What Could France’s Presidential Election Mean for Investors?

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