Wake Up Wall Street (SPY) (QQQ): Dollar charges as inflation runs hot, stocks stick head in sand
Here is what you need to know on Wednesday, November 17:
Take a look at the dollar, boom! Another charge overnight sees it break 1.13 and hit the momentous 1.12 figure versus the euro. Quite a move since Monday. This is a global currency pair, not a meme stock! Usually, this sort of thing does not happen in the currency market, unless you remember the Swiss peg being abandoned. The reason though should be of interest to all equity investors. The dollar is charging as traders assume inflation is now out of control and the US will have to raise rates a lot sooner than Europe will. Growth rate differentials are also at play here but there remains the possibility of both zones entering stagflation.
The equity market though powers on regardless. Why should it do anything else as the Fed policy remains accommodative and money is cheap? Witness valuations for EV stocks and Peloton raising $1.1 billion with investors begging for more. The era of cheap money has inflated stock markets, but knowing when it will stop is the trickier part. While we remain convinced of a bubble waiting to burst, we do not see it happening for upwards of another year.
The dollar has retraced to 1.1320 versus the euro Oil is at $80, Bitcoin is holding $60,000, while yields are steady. Gold is at $1,862.
See forex today
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European markets are mixed: Eurostoxx +0.1%, FTSE -0.45% and Dax +0.1%.
US futures are mixed, S&P 500 -0.1%, Dow -0.1% and Nasdaq +0.1%.
Wall Street Index news
Target (TGT) reports strong earnings, but margins hit as higher supply costs are not passed on to consumers.
Lowe's (LOW) beats on earnings, shares up 4%.
Lucid Motors (LCID) market cap is now higher than Ford (F) as Lucid Motors (LCID) says reservations jumped. see more.
Peloton (PTON) jumps as raises $1.1 billion from a share sale, see more.
Tesla (TSLA): Elon musk sells more stock, see here.
Baidu (BIDU) beats on earnings, up 1% premarket.
Rivian (RIVN) is yet to have a down day as its valuation is now more than Volkswagen and has doubled since the IPO last Wednesday, see more.
Canoo (GOEV) up another 14% as another EV maker sees shares surge. Production not going to start until 2022 but worth $2.5 billion already!
Nvidia (NVDA) reports earnings after the close, see here.
Pfizer (PFE) CFO to retire, an external search begins for a successor. My CV attached!
Amazon (AMZN) to stop accepting UK-issued Visa (V) cards for payment due to high fees.
Upgrades and downgrades
Source: Benzinga Pro
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
