Michelle ThompsonThe dollar remains resilient.
Despite a temporary dip following a left-wing resurgence in France’s elections, the US dollar has maintained a robust performance this summer. Currently, it is approximately 13% stronger than it was in 2021, as indicated by the Fed’s advanced foreign economy dollar index, largely due to the Federal Reserve’s interest rate hikes.
This strength benefits American tourists traveling abroad, but it poses challenges for the multinational corporations that constitute the majority of the S&P 500.
The latest increase in the dollar’s value is influenced by politics but fundamentally driven by the Federal Reserve. Recent polling shows a shift favoring former President Donald Trump over President Joe Biden. If Trump wins in November, it could lead to the continuation or expansion of tax cuts and higher tariffs. Trump has reiterated his intention to impose a 10% tariff on all imports, which could drive up inflation and cast doubt on potential interest rate cuts.
Lisa Shalett, head of the global investment office at Morgan Stanley Wealth Management, noted that the decisive shift in polling towards a Republican win has started affecting market outcomes, with bond volatility increasing. While stock markets have remained strong, equity investors will eventually need to address the potential impacts of policies involving tax cuts, tariffs, and closed borders. Morgan Stanley’s research suggests that expanding the 2017 tax cuts would significantly increase deficits, pushing the dollar even higher.
Additionally, the dollar’s strength is partly due to the weaker performance of some European and Asian currencies. The US economy has shown resilience despite high inflation and interest rates, while the eurozone has entered a recession, and China and Japan face economic challenges.
According to Louis Navellier, chairman and founder of Navellier & Associates, the US dollar’s strength is tied to expectations of leading a global economic recovery. However, this could disadvantage multinational companies in the S&P 500, while smaller domestic firms might benefit. As second-quarter earnings reports begin, there is some concern about the implications of a strong dollar. It makes US exports more expensive, reduces the profits of American companies with overseas operations when converted back to dollars, and increases competition from cheaper imports. While a strong dollar lowers the cost of imported raw materials, it can also boost inflation and negatively impact foreign investments.
Early indicators of dementia may be evident in financial behaviors.
Disorganized financial records, missed payments, last-warning service cutoff notices, frequent daily bank withdrawals, and unusual purchases can be warning signs.
When a normally responsible family member starts mishandling their finances, it could indicate undiagnosed dementia, according to Jeanne Sahadi. Researchers at the New York Federal Reserve found that five years before a dementia diagnosis, an individual’s credit scores often decline, and payment delinquencies increase.
“The harmful financial effects of undiagnosed memory disorders exacerbate the already substantial financial pressure households face upon diagnosis,” the researchers noted. “Beyond susceptibility to payment delinquency, early-stage [Alzheimer’s disease and related disorders] may affect new account openings and debt accumulation, credit utilization, and/or credit mix.”
Boeing has agreed to plead guilty.
Boeing has agreed to plead guilty to a charge of conspiracy to defraud the United States in connection with two fatal 737 Max crashes, as per a Justice Department court filing on Sunday evening.
This plea represents another significant blow to Boeing following a series of safety failures, though it avoids potentially more severe consequences, according to CNN’s Chris Isidore. Boeing will pay fines up to $487 million, a small portion of the $24.8 billion sought by the families of crash victims, who oppose the deal.
This guilty plea tarnishes Boeing’s reputation further, a company once renowned for the quality and safety of its commercial aircraft. The 737 Max crashes are not the only incidents; Boeing has faced multiple safety and quality concerns. For instance, in January, a door plug on a 737 Max operated by Alaska Airlines blew out mid-flight, creating a large hole in the jet and further damaging Boeing’s reputation.
Under the agreement, Boeing will be under the supervision of an independent monitor, appointed by the government, for three years. However, this oversight and the fine do not satisfy the families of the victims, as stated by one of their attorneys.
