Global stocks rebound, but nothing beats the surge in Dogecoin

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Good morning.

You know it’s a bad sign if your markets correspondent is reaching for a cheap Baha Men reference to clue you in on the hot movers of the day. The dog-faced crypto asset, Dogecoin, is crushing it again, up 55% in the past 24 hours, to see its market cap soar past $87 billion at one point.

What’s driving it higher? One theory: “Elon Musk’s upcoming hosting stint on Saturday Night Live, where it’s a safe bet the cryptocurrency will at least get a name check,” my colleague Chris Morris reports.

Over in old-school equities, tech futures are rebounding nicely this morning after Nasdaq suffered its worst sell-off yesterday since March.

In today’s essay, we talk dollars and stocks.

Let’s see what else is moving the markets.

Markets update

Asia

The major Asia indexes are mostly lower in afternoon trading with Japan’s Nikkei down 0.8%.
The coronavirus isn’t just clobbering India. COVID cases are surging across Southeast Asia, including Thailand, Laos and Cambodia, setting up a scramble for essential healthcare equipment and vaccines.

Europe

The European bourses were solidly higher out of the gates, with the Stoxx Europe 600 up 0.8% at the open, before climbing, recovering from most of Tuesday’s losses.
Shares in <strong>Maersk</strong> were up nearly 2% in early trading after the shipping giant, a bellwether for world trade, reported “exceptionally strong” Q1 results and reiterated its upbeat guidance as demand soars.
I live in the southern part of Rome, which, in football terms, is AS Roma territory. Shares in the disappointing calcio club—they remind me of my beloved New York Mets, though at least they’ve won a championship in the past 25 years—shot up yesterday on news of Jose Mourinho managing the club next year. I haven’t spoken to my barber, Alessandro, about this, but I’m sure he’s happy. He may even buy shares, or stop giving me grief about Roma’s American owners.

U.S.

U.S. futures have been heading higher this morning. That’s after tech stocks took it on the chin yesterday, with Apple falling 3.5% and Amazon sliding 2.2%
Where have we heard this before? Trading app Robinhood, one of the most hotly anticipated IPOs of the year, encountered all kinds of problems yesterday executing trades in the one part of the market that was booming yesterday—crypto. Oops.
PayPal, Uber, General Motors and PepsiCo all report today.

Elsewhere

Gold is flat, trading around $1,780/ounce.
The dollar is gaining.
Crude is cruising with Brent trading close to $70/barrel.
Bitcoin is down nearly 2% in the past 24 hours, trading above $55,000. All the action is—woof!—in the not-at-all-dodgy Dogecoin.

***

King dollar

U.S. expats, American importers and foreign companies that do a lot of business in America all love a strong dollar. Everyone else, not so much.

The greenback is the quintessential safe-haven asset. When it goes up, stocks that are sensitive to wild FX swings—think Big Tech multinationals—can, and do, fall.

We saw that decoupling phenomenon yesterday. “Amidst the decidedly risk-off tone among investors, haven assets outperformed in response, with the dollar (+0.38%) and sovereign bonds advancing yesterday,” Jim Reid, research strategist at Deutsche Bank, wrote in an investor note this morning.

Whenever the dollar spikes this year, it seems to trigger a big what’s-wrong-with-the-markets? debate. This could explain the confusion, and the indignation:

Last year, after Election Day, a number of economists and markets forecasters predicted the dollar would have a rough 2021. The calculation was that a historic spending spree by the Biden Administration would sink the greenback. That calculus made sense. Still does.

But what dollar hawks didn’t calculate was that the U.S. would jump out to such a huge lead in vaccinating Americans, while its biggest trading partners in Asia and the eurozone would blunder along. That vaccination gap lifted the dollar to a surprisingly strong Q1 against its peers.

The bumbling vaccine rollouts elsewhere was really bad news for dollar-shorts earlier in the year.

With Europe ramping up its vaccination numbers in recent weeks—I can happily report my wife and I go for jab Number 1 this weekend—the euro has strengthened somewhat against the dollar. Still, the dollar remains stubbornly strong even though a lot of markets commentators are quick to point out it’s priced at a multiple that’s way out of whack with the fundamentals.

Hmmm, where have we heard that “overinflated” paradox before?

For now, most economists are sticking with their earlier dollar calls—that the currency will fall, and that it will underperform the world’s currencies. If true, that should be a nice tailwind for stocks.

But as we learned in Q1, the vaccination gap is a huge factor that underpins dollar strength. And, on cue, COVID cases are trending to frighteningly deadly levels across much of Southeast Asia and elsewhere.

When uncertainty like this spikes, investors tend turn to safe havens. And that’s probably why we’re seeing such dollar resilience.

***

Quick note: As a number of you caught (bad pun), and then pointed out to me: yesterday’s Bull Sheet headline contained a typo, which was corrected in the web version… I can’t blame that one on the dog. It was all me. Thanks for your careful attention to those things. I appreciate it.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

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

Today's reads

In the money. Pfizer shares closed 0.3% higher on Tuesday after the pharma giant reported a potent new money-spinner to its portfolio: the COVID-19 vaccine. The company forecasts booking $26 billion in COVID vaccine sales this year—putting it solidly ahead of its Viagra business.

Sell in May? After yesterday's sell-off, the idea may seem tempting. Such a move could be a big blunder, however. Fortune's Anne Sraders talks to a bunch of Wall Street pros who suggest a different strategy.

The 4 C's. Big diamond is reeling from the news yesterday that Pandora A/S—the world’s largest jewelry maker by volume—will faze out mined diamonds in favor of gems manufactured in a laboratory. The move is part of a wider trend in the industry to clean up its supply chain, a move that appeals to socially-conscious millennial consumers. Apparently, the four C's—cut, clarity, color and carat—are still a selling point, but so too is the demand for gems that don't come from mines or factories where human rights abuses are rife.

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Market candy

Quiz time

Copper broke through $10,000 per tonne yesterday, up more than 28% YTD as the commodities trade takes off. Which of these commodities is outperforming king copper this year?