The French presidential election win by centrist Emmanual Macron should give a boost to certain U.S. stocks and exchange-traded funds with a reliable history of trading higher with the euro.
The euro hit $1.10 against the dollar in early trading, a six-month high with the defeat of Marine Le Pen dealing a big blow against the populist movement sweeping Europe that threatened to possibly break up the currency. The currency declined slightly as trading continued in a bout of profit taking on the news.
If the currency keeps going higher the rest of May, Dow Jones industrial average members that do a lot of business in Europe like Visa and McDonald's may lead gains for U.S. stocks this month, history shows.
There have been 66 times in the last decade when the euro increased by 1 percent in a month's time against the dollar, according to CNBC analysis using hedge fund analytics tool Kensho.
These Dow stocks are the best performers, on average, during those periods:
If the euro keeps increasing this month, exchange-traded funds tied to stock markets in other European countries like Spain and Italy should do especially well alongside France-focused fund, history shows. Emerging market stocks also typically trade higher as the falling dollar versus the euro signifies the return of a risk-taking atmosphere around the globe.
Reference: CNBC
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