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Rising dollar and rates weigh on stocks ahead of earnings season

  • The US dollar was gaining Tuesday, rising with Treasury yields as investors worry about higher interest rates.

  • A strong dollar is bad for S&P 500 companies as it hurts exports and foreign earnings.

  • Watch for company guidance and currency hedges in upcoming earnings reports.

  • The dollar could keep rising if the Fed stays hawkish on rates.

  • Key levels to watch for the dollar index are 111, 112, 114 and 2017 highs.

barrons.com
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The U.S. economy is forecasted to be growing rapidly, which is causing concern for the Federal Reserve and those hoping for low interest rates.
Surging U.S. Treasury yields are causing concern among investors as they wonder how much it will impact the rally in stocks and speculative assets, with the S&P 500, technology sector, bitcoin, and high-growth names all experiencing losses; rising rates are making it more difficult for borrowers and increasing the appeal of risk-free Treasury yields.
The US dollar remains strong against major peers and the yen, as Treasury yields rise amid expectations of high US interest rates for a longer period, while China's central bank sets a stronger-than-expected daily midpoint for the yuan to counter mounting pressure on the currency.
U.S. economic growth, outpacing other countries, may pose global risks if the Federal Reserve is forced to raise interest rates higher than expected, potentially leading to financial tightening and ripple effects in emerging markets.
The US Dollar is facing profit-taking and risk as traders digest the Jackson Hole speech and push back expectations for rate cuts, while upcoming macroeconomic data points will be closely watched for any signs of economic deterioration.
The US dollar is defying expectations and reaching its highest level in six months, proving that talk of de-dollarization has been over-hyped.
The US Dollar experienced a significant decline due to weak economic data and increased risk appetite, while the Euro and British Pound strengthened. The Australian Dollar and New Zealand Dollar also performed well, and gold and cryptocurrencies rallied.
The S&P 500 could experience significant gains in the coming months following the end of the current rate hike cycle by the Federal Reserve, with historical data showing positive returns after previous cycles and strong economic indicators supporting this trend. Investors are advised to consider investing in an S&P 500 index fund or industry-leading stocks like Amazon.
The US dollar experienced weakness due to disappointing economic data, leading to speculation that the Federal Reserve may not need to be as aggressive in its monetary policy settings, while equities showed modest gains; Chinese PMI numbers beat estimates but concerns about the property sector lingered; USD/JPY dipped before recovering; and the DXY index stabilized after recent losses, with potential support levels identified.
The U.S. economy has shown unexpected strength, with a resilient labor market and cooling inflation improving the odds of avoiding a recession and achieving a soft landing, but the full effects of rising interest rates may take time to filter through the economy.
The U.S. is currently experiencing a prolonged high inflation cycle that is causing significant damage to the purchasing power of the currency, and the recent lower inflation rate is misleading as it ignores the accumulated harm; in order to combat this cycle, the Federal Reserve needs to raise interest rates higher than the inflation rate and reverse its bond purchases.
The dollar has reached a five-month high as investors anticipate the need for elevated interest rates due to the strong US economy, with factors such as weak growth in China and Europe, rising US yields, and falling equity prices further supporting the case for dollar strength.
The biggest risk of de-dollarization is that the US could lose a key tool it's used to fight past economic crises, according to JPMorgan.
The rising U.S. dollar is causing concern among foreign officials and investors, but it remains uncertain if anything can be done to stop its rise or if it will negatively impact U.S. equities.
The dollar's strength is expected to be difficult to overcome for most major currencies by year-end, according to a Reuters poll of forex strategists, with risks to the greenback outlook skewed to the upside.
The dollar strengthens against the yen and keeps the euro and sterling near three-month lows as investors rely on the resilience of the U.S. economy, while China's onshore yuan hits a 16-year low due to a property slump and weak consumer spending.
The value of the U.S. dollar has been strengthening against the Euro and the British Pound due to the continuing strength of the U.S. economy and the weakness of the European economies.
The US dollar's dominance as the world's reserve currency is at risk due to growing debt in the US, according to economist Barry Eichengreen, highlighting the importance of controlling debt to maintain the dollar's global role.
The resilient growth of the US economy is fueling a rebound in the dollar and causing bearish investors to rethink their positions, although the currency's rally may face challenges from upcoming data and the Federal Reserve's meeting this month.
European markets are pessimistic ahead of central bank meetings, energy prices raise the risk of secondary inflation, and the US dollar is gaining strength, which may negatively impact precious metals and cryptocurrencies.
The Federal Reserve's continued message of higher interest rates is expected to impact Treasury yields and the U.S. dollar, with the 10-year Treasury yield predicted to experience a slight increase and the U.S. dollar expected to edge higher.
The stock market faces a major issue as the dollar reaches a crucial level and could potentially break out.
Summary: The US Dollar had mixed performance against major currencies, with the British Pound weakening and the New Zealand Dollar rallying; Wall Street took a hit after the Federal Reserve announcement, and the 10-year Treasury yield surged to its highest level since late 2007.
The U.S. dollar remains strong above the $105 mark, supported by the hawkish stance of the Federal Reserve and increased Treasury yields, while gold prices consolidate and oil prices rebound due to supply cuts and positive outlooks for the U.S. and China.
The surge in the U.S. dollar may pose a challenge for U.S. stocks as they struggle through a losing September, creating headwinds for U.S. multinationals and tightening financial conditions.
The US dollar remains strong against major currencies due to rising US bond yields, while the yen is edging closer to levels that may trigger intervention by the Japanese government.
Mounting fears of rates staying elevated for longer sent jitters through global risk assets, pushing U.S. Treasury yields to a peak not seen since the early stages of the 2007-2008 financial crisis and the dollar to a 10-month high.
The S&P 500 is likely to experience more pain in the stock market unless the rise in Treasury yields and the U.S. dollar comes to an end, based on technical charts and trends among index components.
The Federal Reserve's decision to maintain high interest rates has caused concern in the financial markets, with the S&P 500 and Bitcoin potentially underperforming; however, there appears to be a decoupling between the S&P 500 and Bitcoin, which could be attributed to factors such as regulatory concerns and the anticipation of a spot Bitcoin ETF introduction. This decoupling may favor Bitcoin.
Rising Treasury rates and oil prices are creating an unfavorable situation for consumers, investors, and the economy, making it challenging for the Federal Reserve to manage inflation without causing a recession. The potential for a "soft landing" and decreased inflation remains, but the economy should prepare for possible sector-by-sector recessions and a full-blown recession, along with government shutdowns and fiscal policy disputes becoming normal occurrences. The discrepancy between short-term and longer-term rates controlled by the Fed has gained importance, with higher borrowing costs disrupting the stock and bond markets. In this volatile period, long-term investors should hold on and ensure they have enough money saved to weather the storm. While the Fed has pushed short-term rates higher, it has also benefited savers with higher yields on money market funds, short-term Treasury bills, and high-yield savings accounts. However, a strong dollar has impacted S&P 500 earnings, leading to a struggling stock market and increased costs for imports and exports. Rising interest rates pose the greatest economic challenge, affecting consumer loans and dampening spending. Traders who bet on long-term bonds have faced losses due to rising rates, highlighting the inverse relationship between interest rates and bond prices. As a result, it may be advisable to purchase shorter-term Treasuries and keep bond durations lower. The surge in bond yields has also disrupted stock investors' expectations of controlled inflation and the Fed's tightening, leading to stock market losses. The economy and markets may experience more turmoil, as there are various factors beyond the Federal Reserve's control.
Rising interest rates, rather than inflation, are now a major concern for the US economy, as the bond market indicates that rates may stay high for an extended period of time, potentially posing significant challenges for the sustainability of government debt.
The Federal Reserve's aggressive interest rate hikes have resulted in a decline in the profitability of S&P 500 companies, with the return on equity ratio falling this year, and the trend could worsen if interest rates remain high.
The recent surge in U.S. government bond yields, with prices falling, has raised concerns about the stability of the bond market and the economy, potentially leading to more bank failures and market upheaval.
The US dollar strengthened on positive US economic news, higher bond yields, and hawkish comments from Federal Reserve officials, while the euro weakened due to dollar strength and hawkish comments from the European Central Bank.
Rising interest rates on government bonds could pose a threat to the U.S. economy, potentially slowing growth, increasing borrowing costs, and impacting the Biden administration's priorities and the 2024 presidential election.
The S&P 500 has seen a strong bounce off its previous low, but it has yet to fully recover, and the recent rise in Treasury yields and geopolitical conflicts contribute to a cautious outlook on the market's future performance.
The U.S. dollar reached a one-week high against other currencies following the release of U.S. consumer prices data, which increased expectations for higher interest rates; safe-haven buying also contributed to the dollar's strength due to escalating Middle East conflict.
The surge in US treasury yields has caused concern among investors due to the lack of an easy explanation, with expectations of hawkish monetary policy, increased bond issuance, and declining demand being potential factors contributing to the rise.
The U.S. economy's strength poses a risk to the rest of the world, leading to higher interest rates and a stronger dollar, while global trade growth declines and inflation persists, creating challenges for emerging markets and vulnerable countries facing rising debt costs.
The S&P 500's record-breaking performance, driven by a handful of technology stocks, is causing concern among economists due to their inflated valuations and the high levels of Treasury debt yields, suggesting an imminent correction in the market.
The dollar’s status as the world's reserve currency is at risk unless the US controls its spending, warns bond market expert Jeffrey Gundlach. High interest rates and the growing US debt could lead to out-of-control inflation and jeopardize the future of the US dollar.
The surge in bond yields is causing losses for investment funds and banks, pushing up borrowing costs globally and impacting stock markets, while the dollar remains stagnant and currency traders predict a recession on the horizon.
The US dollar remains strong, supported by rising yields and tensions in the Middle East, but it is too early to determine if it has reached its peak, as the market awaits further tightening from the Federal Reserve and economic convergence among countries.
Ten-year Treasury yields surpassing 5% means higher interest rates for mortgages and car loans, putting a strain on the US economy, but despite the warning signs, the US economy still appears to be growing with the S&P 500 up 10% this year and the Nasdaq rallying over 20%.
The U.S. dollar strengthened to a near 1-week high against a basket of currencies as investors turned away from riskier currencies due to lackluster corporate results and rising Treasury yields.
The US dollar strengthens as long-term yields rise, while market movements are influenced by geopolitics and interest rates rather than earnings.