Stocks are having a good war, but the dollar is not
- Israel and Iran continued to bomb each other today. This is a scenario once considered potentially disastrous for the asset market. However, while oil prices have risen as a result of the conflict, the rise is moderate, making it easier for stock investors. However, the US dollar has reached a historically low level of enthusiasm among institutional investors. Bank of America.
The Stoxx Europe 600 fell 0.9% in early trading, but this was the only drama in today’s global asset market. The VIX Volatility Index is backing down after the S&P 500 delivered solid performance yesterday. The S&P 500 futures were only 0.7% apart this morning.
Stocks rose in Japan, but in China they were flat.
A big surprise this week appears to be the relaxed, almost cheerful attitude of investors towards the Israeli-Iran conflict. US stocks have risen in the last five trading sessions as traders await a US Federal Reserve rate decision tomorrow. Federal Reserve Chair Jerome Powell is expected to keep the rates the same. It would be a change in his commentary that drives the market.
Why are stocks shrugging from bombing? According to the latest survey by Bank of America’s Global Fund Manager, the facility’s bull has returned. The survey calls for 222 panelists under $587 billion control. “The bottom line: Investor sentiment will recover to pre-relatable ‘Goldilocksbull’ levels as trade wars and recessions are likely to wander,” said Bofa’s Michael Hartnett and his team. luck.
Despite this, there is still one asset investors dislike right now, and that’s the US dollar. The dollar has lost almost 10% of its value on foreign currency this year. According to the DXY index. BOFA says investors are currently the lowest in the dollar in 20 years. “() The biggest summer pain trade is long,” Hartnett et al.
Convera’s Antonio Ruguilero also pointed out the weakness of the dollar. “In the midst of an escalating geopolitical tension in the Middle East, 12% on Friday further exposed the appeal of the dollar’s declining safety vessels. The clear divergence is taking shape. The power of the dollar’s positive — oil prices are rising, especially during periods of geopolitical risk.
“The only meaningful support for the dollar now remains the Hawkish Fed, and is now back in full warning mode. We leave these soft CPI prints far away in the past. Whether tariffs are induced or not, driven by a surge in oil prices in the looming inflationary pressure, the Fed can be put in a more stringent position and implement the interest rate cuts the Trump administration is sought.”
Here is a snapshot of the action before the New York Opening Bell:
- S&P 500 Futures It was 0.7% off this morning. Index itself Yesterday it rose 0.94%.
- Stoxx Europe 600 Early trading sank 0.9%.
- Nikkei 225 in Japan It rose 0.59%.
- Korean Cosplay It was flat.
- China’s SSE composite It was flat again.
- Nasdaq composite Yesterday, 1.5%, driven by various high-tech stocks, rose.
- Coinbase An increase of 7.7%.
- reddit An increase of 6.8%.
- Palantir It rose almost 3%.