Global stock prices have risen by $5 trillion in the last 3 months

Global stocks surged by $5 trillion in the past 3 months.

In an email Tuesday, Deutsche Bank's Torsten Sløk wrote that some of his clients are worried that the strong dollar is the biggest drawback on economic growth and inflation.

They also say it's why the Federal Reserve, which has expressed concern on the pace of the dollar's appreciation, will keep interest rates lower for much longer.

But there's too much focus on dollar strength while stock markets continue to climb:

"It is correct that the dollar has appreciated substantially since last summer. But over the same period oil prices have declined, US interest rates are lower, and over the past three months global stock markets have increased by $5trn, see chart below. In other words, next time someone wants to talk to you about the negative effects of the rising dollar please ask them how the negative effect from the dollar compares with the positive effects of lower oil prices, lower interest rates, and higher stock prices. Bottom line: There is more going on than the rise in the dollar and I think the consensus is underestimating the positive impact of the ongoing rise in global stock markets on global growth."

On Monday, we highlighted that the strong dollar was the number one thing companies were complaining about right now. But at least looking at global markets, investors seem to be okay with it.

Deutsche Bank