💰US Dollar- A strength or Curse?💣

The US dollar has been upward this year, which gains around 10%. It is driven by the inflation concern, pushing people towards havens such as the dollar. The interest rate has also been a driver of this trend and has caused investors uneasy. 

A strong US dollar has hurt the equity market as overseas sales translate to lower profit in the dollar term. The good news is that people are seeing a possibility of a weakening dollar. Indeed, we are seeing the dollar index falling to around 105, down from the peak of 108 in mid-July. 

As interest rate retreats, dollar strength could also diminish. The 10 Year Treasury yield has fallen to 2.61% after hitting a high of 3.5%. The Fed has been tough on the short-term interest rate to reduce economic demand, which lowers the return on long-term debt. 

If the dollar continues to see some weakness, it could boost earnings.

🛎Pinterest: Rising on good earnings📈

The stock rose in extended trading as second-quarter results were better than expected. Revenue rose 9% on year comparison. In addition, further progress has been made in the shopping and eCommerce segment, which has helped build its mindshare in the growing eCommerce sphere. 

The company expects 3rd quarter revenue to grow at a moderate pace, and currency headwind could be more amplified though nothing shocking on the report. 

💡Equity market finding footing🗽

The stock market is generally muted after a good gain in July as investors see a possible less aggressive rate hike regime as the economy starts to slow down. However, the earning season is generally positive, while economic data still hold well. 

Nonetheless, fresh geopolitics headwind from Pelosi’s potential visit to Taiwan may add pressure to the rally and could negatively affect equity if the trip is realised. 

Pika World options had been hit hard yesterday, and we are mindful to possibly take some losses to protect our capital base better as risk-off sentiment may be simmering while the market remains choppy.