Dollar’s Momentum Slows Following Rally: Market Overview

The U.S. dollar takes a pause after its recent climb, ending a three-day rise on Friday. Despite this, the currency is still on track for an unmatched series of weekly gains, fueled by speculation that the Federal Reserve will sustain elevated rates. This deceleration brought some relief to commodities and emerging markets.

Key Points:

  • The Bloomberg Dollar Spot Index sees a break in its surge but is set for an eighth successive week of gains, marking the lengthiest since 2005.
  • The S&P 500 trends below 4,500, headed for a weekly drop as Treasuries do the same.
  • The offshore yuan moves closer to its lowest ever, spurred by a cut in the daily reference rate, indicating China’s ease with a slow depreciation.
  • Reports suggest the U.S. economy is strengthening, in contrast to cooling momentum in Europe and China.

Fed Insights:

  • New York Fed Bank President John Williams expressed contentment with the current U.S. monetary policy, emphasizing the need to study data before making decisions on interest rates. Lorie Logan from Dallas hinted that a potential bypass of an interest-rate increase might be suitable for the upcoming policy meeting.
  • Bank of America Corp. strategists, led by Michael Hartnett, caution that prolonged high-interest rates could negatively affect the U.S. economy and lead to a stock selloff in the coming months.

Corporate Updates:

  • Kroger Co. (KR) and Albertsons Cos. (ACI) finalize selling 413 stores to C&S Wholesale Grocers to secure antitrust approval for a $24.6 billion merger.
  • Apple Inc. (AAPL) gears up to reveal the iPhone 15, new smartwatches, and the latest AirPods next Tuesday.
  • Strikes commence at Chevron Corp.’s (CVX) major LNG sites in Australia, escalating global gas market tensions.
  • Adobe Inc. (ADBE) witnesses a rise post a positive rating shift by Mizuho Securities.
  • Smith & Wesson Brands Inc. (SWBI) gets a boost from higher-than-expected earnings, while RH faces a decline due to underwhelming revenue forecasts.
  • First Solar Inc. (FSLR) gains traction as analysts elevate their price projections, following the company’s announcement of financial goals up to 2026.

Market Movements:

  • Stocks showed minimal shifts with the S&P 500, Nasdaq 100, and Dow Jones exhibiting marginal fluctuations. Currency markets observed the dollar spot index dropping by 0.2%, while Bitcoin and Ether recorded slight dips. The yield on bonds experienced minor reductions, and commodities like crude oil and gold saw modest increases.

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Dollar’s Momentum Slows Following Rally: Market Overview

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