STRONG DOLLAR WINDS

In case you didn't know it, Procter and Gamble, the largest consumer goods firm by sales, is 178 years young.

Back to that in a bit.

Falling energy prices were touted as a big positive for consumers who were expected to get those savings out of their hot little hands in a hurry.

In fact, this was a popular MSM meme second only to last year's big Wall Street one about rising bond yields, something that never happened.

Such memes usually come gift wrapped in the typical, arrogant Wall Street "No-Brainer" packaging. Race track touts used to call them "Sure things."

Consumers and the economy in the eyes of most half-blind economists are Siamese twins attached at the pocketbook. Consumer spending numbers may get revised upwards when they hit the street next month. But the spillover effect has yet to hit industrial firms reporting 4Q earnings, the Financial Times reports.

Headwinds so far include a stronger U.S. dollar, low energy prices, slow global growth and, yes, even those much revered by many bureaucrats, economists and politicians, low interest rates. And a once popular advertising slogan, "Where's the beef?' has now become--with the so-called unemployment rate at 5.6%--where's the average hourly earnings?

Wage growth for all the talk about economic strength in the U.S. has disappointed so far. And that brings us back to Procter and Gamble, the 178-year-old largest consumer goods company by sales and its recent announcement that it's been hit by the "most significant fiscal year currency impact" in its history. 

Those are pretty big words covering a pretty long time.

It's another way of saying earnings are taking a hit. To date much of the price in p/e ratios, it's no secret, has been supported by share buybacks and raised dividends. Some of those dividends paid for with borrowed money. 

So p/e ratios become a concern. Who wants to pay more for less?

Rising interest rates could pose a threat to the wind beneath the wings of those rising dividends without support from rising earnings irrespective of what the Fed does.