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‘It’s all about the dollar:’ As the greenback strengthens, the markets tumble

September 24, 2020, 8:24 AM UTC

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Good morning. Yesterday’s sell-off in the U.S. is sweeping the globe, with Asia and European shares edging lower. You can add a soaring dollar to the growing list of markets headwinds—right up there with rising COVID cases, a breakdown in fiscal stimulus talks, election jitters and vaccine timeline worries.

Let’s check in on the action.

Markets update


  • The major Asia indexes are in the red in afternoon trading, with Hong Kong’s Hang Seng down 1.7%.
  • I’ve lost faith.” That’s what one powerful HSBC shareholder said as the bank sunk to a 25-year-low and loyalist investors harbor second thoughts about their stakes.
  • Day-traders the world over aren’t all that different. Take Malaysia, where newbie investors jumped into the market earlier this year when the government put a six-month freeze on loan repayments. Why not put that spare cash into shares? What could go wrong?


  • The European bourses were down out of the gates with London’s FTSE falling 1.3%, erasing Wednesday’s gains.
  • With COVID cases rising across much of Europe, localized lockdown measures are going into force in the U.K., France and Spain. Elsewhere, countries are trialing innovative new measures to get business off the ground. Case in point: the Finns are deploying coronavirus-sniffing dogs at Helsinki Airport.
  • Airbus shares sank 3.3% this morning as news broke one of its largest customers, Delta Air Lines, is in talks with the planemaker to delay an order for at least 40 aircraft due next year.


  • U.S. futures are in the red again. That’s after the Dow slumped 525 points and the Nasdaq dropped a further 3%. The tech-heavy exchange is now 12% off its Sept. 2 all-time high.
  • Tesla fell a further 10.3% yesterday after Tuesday’s Battery Day event failed to charge up investors. The EV pioneer is down 24% this month, but there are a number of analysts saying, don’t lose faith.
  • Nike was the rare bright spot yesterday, climbing nearly 9%. That’s after the athletic gear maker reported it had hit its e-commerce sales goal a whopping three years early.
  • What’s on the calendar today? U.S. unemployment data and new home sales.


  • Gold is dropping again, trading near $1,850/ounce, off roughly 100 bucks in the past week.
  • The dollar is up again, and that’s spooking the equities market.
  • Crude is off, sending Brent down 1%.



On stimulus spending

The optimists

According to CNBC, Rep. Rashida Tlaib (D-Mich) asked point blank: “Yes or no, do you believe another stimulus check could help stabilize the economy?” “I do,” Mnuchin said. “The administration does support another stimulus payment.” Powell also expressed agreement that the economy needed more help from the government.

The pessimists

Dollar daze

Strong dollar: it’s sinking equities and gold. Run for the hills!

Weak dollar: it’s inevitable:

Economist Stephen Roach warns next year will be brutal for the dollar.

Not only does he see growing odds of a double-dip recession, the Yale University senior fellow believes his “seemingly crazed idea” that the dollar would crash shouldn’t be so crazy anymore.

“We’ve got data that’s confirmed both the saving and current account dynamic in a much more dramatic fashion than even I was looking for,” Roach told CNBC’s “Trading Nation” on Wednesday.

Bull or bear?

Which one are you?


Have a nice day, everyone. I’ll see you here tomorrow. 

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's reads

Turnaround specialist. In late August, I spoke with Sergio Ermotti, the outgoing CEO of Swiss banking giant UBS. You may recall UBS as the foreign bank most exposed to America's subprime crisis. That debacle forced the lender into a painful and embarrassing bailout by Swiss authorities in 2008. Ermotti came on the scene a few years later, taking the reins of the bank at one of the lowest points in its 158-year history. Ermotti deftly turned the bank around, and now UBS has become a model in the lucrative sector of wealth management, calling half of the world's billionaires, clients. If you like turnaround stories, this one's worth your time

What CEOs think... about work-from-home. "I don't see any positives," says Netflix's Reed Hastings. "We’ve seen productivity drop in certain jobs and alienation go up in certain things," says JPMorgan Chase's James Dimon. It's hard to find a good word for WFH from the bosses of the world's biggest companies. I'm a bit surprised, however, they're this down on it.

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Market candy

Quote of the day

“It’s been a big win... We are short and still are short.”

That's Nathan Anderson, the now infamous short-seller who took down the EV manufacturer Nikola earlier this month. Anderson spoke to the Wall Street Journal's Gregory Zuckerman about the report that made him famous, and which sent Nikola shares plummeting, forcing out founder Trevor Milton. “The story is definitely not over,” Anderson says. Stay tuned.