Daily Briefing – Aug 19, 2020 – Euro Strength Driving Dollar Weakness, Inflationary Breakout Stories: Roger Hirst

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 19 August 2020

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

Senior editor, Ash Bennington, joins managing editor, Roger Hirst, to take a deep dive into the apex predator of currency markets: the U.S. dollar. Roger argues that the size and speed of the dollar’s fall is driven more by euro strength, flowing out from the ECB’s move toward debt mutualization, than it is by dollar weakness. He explains how certain EM currencies are still weakening as compared to the dollar and how the ECB and the BOJ may find it difficult to hit their inflation targets should their currencies continue to strengthen. Roger also expounds on how bond yield convergence between the U.S. and Europe is contributing to euro strength. In light of these potential structural challenges and the supply and demand bottlenecks due to COVID-19, Ash and Roger then explore how to play the trade and the ongoing bifurcation of financial markets and the economy. In the intro, Peter Cooper looks at Apple’s $2 trillion valuation and Target’s Q2 earnings report. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	It's Wednesday, August 19, 2020, just after market close in London. This is the Real Vision Daily Briefing. I'm Ash Bennington in New York,
0:16.0	joined shortly by Real Vision Creative Studios Roger Hurst. But first, Peter Cooper with the day's stories.
0:22.7	Thanks, Ash.
0:23.8	Yesterday, the S&P hit a record-breaking closing high
0:26.7	of 3,389.78.
0:30.1	At least for now, this new high is held up,
0:32.4	trading slightly above yesterday's close at time of recording.
0:35.9	Since the beginning of the pandemic, the S&P is up 52% from its lows.
0:40.4	The index is swift and momentous move upward has largely been driven by big tech.
0:45.0	Today Apple has reached the $2 trillion market cap threshold, making it the first US company to reach a $2 trillion valuation.
0:52.0	Apple is up roughly 0.7% on the day. company to reach a $2 trillion valuation.
0:52.8	Apple is up roughly 0.7% on the day,
0:55.3	and has been up 20.89% since its latest earnings report
0:59.2	was released on July 30th.
1:01.0	At this level, Apple's valuation alone is almost as much as the total market
1:04.8	cap of the Russell 2000. During the course of the pandemic, Fang stocks have quickly
1:09.5	become the heavyweights in terms of the overall S&P 500 market cap, hovering around 20%.
1:15.8	Up more than 5% from its January level close to 14%.
1:20.0	Also today, Big Box retailer Target announced its Q2 earnings, reporting its largest
1:25.2	quarterly sales increase in its 58 years of operations. Target CEO Brian Cornell reported a 24%
1:31.7	year-on-year rise in like for like sales. Its stock is up 12% on the day at the time of recording.
1:37.5	This increase in sales can be linked to a strong consumer demand the company reported across all categories.
	...

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