Episode summary
S&P 500 Hits Record High as Dollar Selloff Deepens | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec · Guests: Carter Johnson, Sheila Kahyaoglu, Jennifer Dlouhy, Karen Veraa-Perry
Summary
The show centered on the dollar’s sharp slide, with Bloomberg News FX and rates reporter Carter Johnson arguing that the move reflects both US policy uncertainty and improving growth expectations abroad. He said the selling is showing up across currencies, especially in dollar-yen, and that investors are increasingly hedging US exposure rather than abandoning US assets outright. He also noted that a weaker dollar could eventually aid US exporters and manufacturers, though not immediately.
On rates, Johnson and the hosts focused on the Federal Reserve’s upcoming decision, with markets expecting the central bank to stay on hold. The discussion turned to whether tomorrow’s statement or Chair Powell’s press conference could signal a path toward higher rates if inflation pressure returns, which would provide support to the dollar. Karen V. Perry of BlackRock echoed the view that the Fed is likely to remain data dependent and that investors are favoring intermediate-duration bonds, investment-grade credit, and international fixed income as the dollar weakens.
The second half of the show shifted to corporate earnings and sector winners. Sheila Kahyaoglu of Jefferies said airlines remain focused on revenue growth and cost control, while Southwest Airlines faces a pivotal test as it adds extra-legroom seats. She was constructive on defense, pointing to surging global and US military spending, stronger backlogs, and more collaboration between incumbents and upstarts. On Boeing, she argued the stock still works if management can keep driving free cash flow toward its 10 billion target, despite near-term volatility.
Key takeaways
- Carter Johnson said the dollar’s decline reflects both US policy uncertainty and stronger growth expectations in Europe and Asia.
- Johnson said the market is not yet in a full risk-off pattern where stocks, Treasuries, and the dollar fall together.
- Karen V. Perry said BlackRock is seeing flows into international fixed income, investment-grade credit, and short-duration bond ladders as the dollar weakens.
- Sheila Kahyaoglu said Southwest’s extra-legroom strategy could lift earnings, but United is the more attractive airline bet because of premium-seat demand.
- Kahyaoglu said defense remains supported by rising NATO and global budgets, with US spending potentially climbing from 1 trillion to 1.5 trillion.
- Kahyaoglu said Boeing could rerate if it proves out 10 billion in free cash flow, even after near-term market skepticism.
Notable quotes
“we can look at this on a pretty long timeline. So, I'm starting to hear comparisons late last week, today, yesterday to this feels like early 2025 and liberation day all over again”
“the answer honestly is both. And a lot of that impulse, as we just talked about, is because of a declining dollar and questions about US policy”
“We're seeing people being more selective about where they get their income”
“The stock's at $40 today. Some people think it's going to 30. Some people think it's going to 80”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news.
This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenc on Bloomberg Radio with more on the currency trade and declines in the US dollar.
Bloomberg News FX and rates reporter Carter Johnson is here in the Bloomberg Business Week studio. The declines that we continue to see in the US dollars, the flows behind it, what's the story that's telling you?
Sure. Absolutely. Thanks, Tim.
Thanks, Carol. And I think what's really interesting is we can look at this on a pretty long timeline. So, I'm starting to hear comparisons late last week, today, yesterday to this feels like early 2025 and liberation day all over again.
Um, and that's just because, um, yes, we're seeing some action in stocks in Treasury in treasuries, but really this is a a real sort of dollar focused impulse to sell. Um and of course on a shorter timeline as well, we can think about that in the context of what we saw last week which was some pretty concerted movement in dollar yen specifically and that was um as we reported um likely because um some folks here in the US, the New York Fed acting at the behest of the Treasury um were reported to us uh to be inter or uh checking rates and um sort of calling into some banks and and seeing where exchange rates were trading. So on a couple different levels sort of in the near-term and in the big picture as you mentioned Carol questions about the US fiscal position policy uncertainty those are all combining right now
Carter reading in this morning you know Bloomberg reporting out the positioning is heavily one-sided they said since Thursday roughly twothirds of options trades in the euro and the Australian dollar have been bets on further green back weakness.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- s&p 500 record highs
- dollar weakness
- fed rate decision
- corporate earnings outlook
- fixed income etfs
Companies and tickers mentioned
- UPS
- UNH
- BA
- JEF
- BLK
- United Parcel Service Inc.
- UnitedHealth Group Inc.
- Boeing
- Jefferies
- BlackRock
Watch the episode
Watch “S&P 500 Hits Record High as Dollar Selloff Deepens | Bloomberg Businessweek” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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