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Wall Street Journal
25-07-2025
- Business
- Wall Street Journal
Stock Market Today: Dow Futures Waver; Dollar Strengthens — Live Updates
With one week to go until the Trump administration's Aug. 1 tariff deadline, investors are on tenterhooks for any progress toward trade deals. Stock futures were little changed early Friday, after the S&P 500 and Nasdaq Composite both hit record highs again. The WSJ Dollar Index edged higher. Earnings are due from companies including Charter Communications and HCA Healthcare Friday morning, on what will be quieter day in reporting season.
Yahoo
13-06-2025
- Business
- Yahoo
The WSJ Dollar Index Rises 0.3% to 94.93
FOREIGN EXCHANGE The WSJ Dollar Index is down 0.67 point or 0.70% this week to 94.93 –Largest one-week point and percentage decline since the week ending May 23, 2025 –Down for two consecutive weeks –Down 0.
Mint
09-06-2025
- Business
- Mint
Will America's unbalanced trade doom the dollar?
The Trump administration and Wall Street haven't exactly seen eye to eye, but they are starting to agree on one thing: America's trade deficits are a problem and the dollar might not stabilize until imports and exports realign. But in reality, it is more likely that the currency's fate depends on the success of the 'Magnificent Seven" stocks. In April, the trade deficit halved, official data showed Thursday. This was largely because companies had stocked up in March ahead of 'Liberation Day" tariffs, but the 19.9% drop in imports still exceeded economists' expectations. Declines in imports of cars, cellphones and other goods suggest tariffs are helping narrow the deficit. With the WSJ Dollar Index down 7% this year, many investors who are concerned about the Republican Party's tax-and-spending bill see a connection between the trade and fiscal deficits, echoing comments by Treasury Secretary Scott Bessent. 'America's net external asset position is the best metric to measure fiscal space, and this is on a rapidly deteriorating path," Deutsche Bank economist George Saravelos recently wrote to clients. Across wealthy countries, the cost of government borrowing tracks the balance of assets minus liabilities with the rest of the world, called the net international investment position. Switzerland, a net holder of foreign assets, has 10-year yields of 0.4%. The U.S., by contrast, is the biggest net external debtor among top nations, with a negative investment position equal to 88% of gross domestic product last year. It borrows at 4.5%. Trade is central to the discussion: Accounting-wise, America borrows from foreigners whenever there is a gap between imports and exports. The negative external balance mainly reflects trade deficits accumulated since the 1990s. In one regard, the link with the budget deficit is clear: If, on net, companies and consumers spend more abroad, demand is weaker at home and unemployment could rise, so the government has an incentive to fill the gap. Anticipating inflation, central banks in importer nations keep interest rates higher. Yet the orthodox prediction is that a large buildup of external liabilities eventually leads foreigners to stop refinancing them, or the currency to readjust, and it hasn't panned out. It appeared to work in the U.S. in the 2000s when, as trade deficits widened, the dollar weakened and boosted the value of U.S. assets held abroad, improving the external balance. Starting a decade ago, however, imbalances worsened again, with a dollar surge exacerbating them. For President Trump's chief economic adviser, Stephen Miran, and economists such as Peking University's Michael Pettis, the explanation is the dollar's 'global reserve" role. They argue that it prompts exporter nations with excess savings, particularly China, to invest in U.S. assets, with the resulting capital inflows keeping the dollar overvalued and forcing either the federal government or Americans themselves to take on excessive debt—the latter having caused the 2008 financial crisis. But this isn't quite right. When foreign companies sell more to the U.S. than they buy, they end up with dollars in cash, which is a U.S. liability. But this is just payment for purchases, it doesn't imply U.S. importers literally borrowing from overseas. Foreign exporters aren't refinancing ever-expanding debt: They are selling products and accumulating money in the bank, with little reason to stop—even if those dollars are eventually recycled into other investments. Meanwhile, actual lending by foreign investors to Americans isn't recorded in net external balances because there is no net increase in liabilities: The U.S. issues debt but receives cash in return. This is why the link between external deficits and credit booms is actually hard to find. Take Britain's vote to leave the European Union in 2016: The pound crashed instantly as investors priced in diminished growth expectations, yet trade and debt refinancing carried on uninterrupted despite a huge external deficit. Indeed, changes in exchange rates and net international investment positions have shown no correlation over the past decade outside of the U.S. either, according to cross-country data from the International Monetary Fund. As for the greenback's special role, it has coexisted with both weak and strong exchange rates since President Richard Nixon suspended gold convertibility in 1971. Dollar appreciation since 2014 has coincided with foreign Treasury holdings staying flat. To be sure, there are cases in which foreign inflows push up the currency and worsen the external position. Conversely, the current weakening of the dollar could help narrow the deficit. The point, though, is that exchange rates are driven by many factors. Forecasts of U.S. return-on-equity have strongly correlated with the dollar's value over the past decade, while also worsening the net international investment position: Foreigners have poured into U.S. stocks—counted as liabilities—that have surged thanks to the economy's strength and Silicon Valley's global edge, reflected in April's $25.8 billion services surplus. It is hard to argue that higher returns should lead a country's currency to depreciate. What matters now is whether the artificial-intelligence boom and a resilient job market—despite hiring slowing mildly in May—can offset steep equity valuations, erratic tariff policies, and Section 899 of the new spending bill, which threatens to raise taxes on foreign investors. The dollar's struggle to remain at historically elevated levels doesn't depend on rebalancing anything. Write to Jon Sindreu at
Mint
06-06-2025
- Business
- Mint
Wall street is too pessimistic on the Dollar. That could be a problem.
The dollar is struggling, and strategists overwhelmingly agree it's heading even lower. But with such strong consensus on a negative outlook, any positive news on the greenback could deliver an unexpected—and much harder—blow. For investors, it's a risk worth considering now. The U.S. Dollar Index, which measures the value of the dollar against a basket of foreign currencies, fell as low as 0.45% during Thursday's trading before recovering. The WSJ Dollar Index, a similar but newer index, fell to lows last seen in summer 2023 during the session, but finished at 95.21, a level that isn't particularly significant. That bodes well for Wall Street's big banks, who've been increasingly predicting a dollar rout. On Thursday, Deutsche Bank's macro strategist Tim Baker said the proposal for new levies on foreign investment adds to the firm's bearish view on the dollar. Bank of America's foreign-exchange strategist Alex Cohen referred to his team as 'core dollar bears." Morgan Stanley's Matthew Hornbach expects the dollar to slide in 2025 and some part of 2026. That's not all. JPMorgan Chase, Goldman Sachs, and Société Générale strategists are others part of this near-consensus view on the greenback. It's important to note that Wall Street isn't predicting an all-out demise for the U.S. dollar: The currency is entrenched within global financial machinery, and any significant decoupling by foreigners selling U.S. assets could take years. However, big money managers, hedge funds, and other institutions who've been holding lots of dollars by overweighting U.S. stocks or other dollar-denominated assets are rethinking exposure under a new, fast-paced regime in Washington, D.C. President Donald Trump's tariffs also imply fewer dollars in the hands of other countries as they sell less goods in the U.S. That, in turn, will reduces foreign nations' ability to buy as many U.S. assets. Also, the dollar's usual role as a safe haven and a buffer against market swings is being questioned: The greenback is not reacting to moves in the S&P 500 and other major indexes as it once did. But here's the kicker: Even with many factors pointing to further dollar weakness, its not crazy to think that the dollar could go up—and that makes the groupthink on the dollar risky. Economic data could give the dollar a much-needed boost. Initial jobless claims published on Thursday were higher than economists anticipated. However, the unemployment rate has remained rather steady at 4.2%, and inflation seems more or less in control; an improvement on the economic front can strengthen the dollar. 'While the longer-term USD outlook is still bearish, a move lower from here may require signs of cracks forming in the economic data," wrote Kit Juckes, Chief FX Strategist at Société Générale on Monday. Trump's evolving tariff policy is another wild card. Trump said he had a 'very good" phone call with Chinese President Xi Jinping on Thursday, which likely led to the dollar moderating its losses. It's unclear where negotiations between the U.S. and Europe stand, Cohen pointed out in a note listing upside risks to his bearish call. However, most harsh rhetoric between the U.S. and foreign powers has been walked back soon enough, he wrote. Goldman listed the comeback of U.S. exceptionalism talk as 'the biggest risk to our forecast for further Dollar depreciation." If Trump uses money from tariffs as fiscal support, that could eventually strengthen the dollar—and foreign investors may get drawn by even higher yields on bonds and cheaper equity valuations on stocks. When pessimism is this strong, its wise to consider if the market could have other plans that could make a sudden rebound hurt badly. Write to Karishma Vanjani at
New York Post
27-05-2025
- Business
- New York Post
Dow soars more than 400 points after Trump postpones 50% tariff on EU imports
Stocks surged on Tuesday as markets rebounded from last week's tariff scare following President Trump's decision to postpone new levies on the European Union after a weekend call with European Commission President Ursula von der Leyen. The Dow Jones Industrial Average soared by more than 400 points — or 1.16% while S&P 500 climbed 1%. The Nasdaq Composite, an index dominated by tech stocks, jumped 1.9%, or 367 points. Treasurys also rallied, sending the 10-year yield down from Friday's close above 4.5%. The WSJ Dollar Index also strengthened after touching a multi-month low late last week. 3 Stocks surged on Tuesday as markets rebounded from last week's tariff scare. AFP via Getty Images The upswing came as investors welcomed signs of a diplomatic thaw in US-EU trade tensions. On Friday, markets slid after Trump threatened to impose a 50% tariff on EU imports within days, while also warning that foreign-manufactured iPhones could face tariffs. But sentiment shifted after Trump confirmed the new duties would be delayed until July 9, giving both sides time to negotiate. In a post on Truth Social early Tuesday, Trump said the European Union had reached out to schedule talks: 'This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America.' EU trade chief Maroš Šefčovič said the bloc was committed to avoiding 'the mutual pain of tariffs' and would accelerate talks with Washington in the coming weeks. The White House has not publicly commented on the contents of the call between Trump and von der Leyen, though insiders say both sides are seeking a temporary framework to de-escalate tensions. European stocks also rallied, with Germany's DAX index hitting a record intraday high, as global investors cheered the delay in trade restrictions. 3 President Trump postponed tariffs on imports from the European Union over the weekend. AP The bond market staged a global rally, with long-dated government debt rising sharply, especially in Japan, amid speculation that Tokyo may reduce long-bond issuance. Elsewhere, gold prices fell nearly 2%, while Bitcoin hovered near $110,000, close to all-time highs. Investors are also turning their attention to key catalysts ahead. 3 Trump's decision to postpone new levies on the European Union came after a weekend call with European Commission President Ursula von der Leyen (above). AFP via Getty Images Chipmaker Nvidia is set to report earnings on Wednesday, with expectations high after its recent AI-fueled rally. Several other S&P 500 companies are also due to report this week, providing fresh insight into the health of corporate earnings. Meanwhile, the Federal Reserve will release minutes from its latest policy meeting, which are expected to shed light on its inflation outlook and rate path. The central bank's preferred inflation metric — the core PCE price index for April — is due later in the week. Speaking Tuesday, Minneapolis Fed President Neel Kashkari called for caution in adjusting monetary policy. 'It makes sense to keep rates on hold until we have more clarity on the global trade outlook,' Kashkari said. Fresh economic data released on Tuesday showed durable goods orders slipped in April — the same month Trump announced a fresh round of tariffs targeting strategic industries, adding another layer of uncertainty to the trade and growth picture.
