The mighty dollar may be about to crack, says this strategist, who offers stocks to watch on either side.

Stock Market


Technical analysts warn that markets are poised to retest June lows, with 3,640 on the S&P 500 SPX,
-0.72%
in the spotlight.

“Investors have become much less comfortable with this tighter liquidity environment, with many realizing that it will remain in place for a much longer period than initially expected, ultimately leading to the current declining appetite for riskier assets,” says Pierre Veyret , technical analyst at ActivTrades.

One result has been a steady push by investors into the dollar, which Citigroup strategists described as “one of the only places to hide.” While the dollar looks overvalued and a turning point is inevitable, Citi says either “global growth expectations have to turn or the Fed has to turn,” for that to happen.

We call of the day comes from Julian Emanuel, Evercore ISI’s chief equity and quantitative strategist, who thinks the Fed will drag the dollar lower sooner than many think.

Emanuel told clients in a note that last week’s FedEx FDX,
-21.40%
Profit gloom and the inverted yield curve between the two- and 10-year Treasuries are red flags for a global recession reaching American shores.

With that, Emanuel expects that “the Fed can (and should) guide markets on Wednesday that ‘data reliance’ for the central bank’s November 1-2 FOMC decision is 0-75bp in hikes, not 50-75.” Given the Fed will assess enormous tightening already in place and potential for messy midterm elections, the strategist thinks the US dollar “will continue to temper its strength.”

The dollar index is up about 1.3% so far for September, after a stunning 2.6% gain in August.

Evercore ISI

The Evercore team offers a list of “Dollar-Down Numbers” – S&P 500 SPX,
-0.72%
names that could outperform in the event of a dollar pullback, along with “Buck Backsliders” stocks that underperform amid a weakening dollar.

From the “Denominators” list are export-oriented sectors with more than 70% exposure to foreign income and high short interest, which performed below their peers in 2022. NVIDIA NVDA,
+2.08%,
Linde LIN,
+0.16%,
Mondelez International MDLZ,
+1.23%
and Estee Lauder EL,
-2.21%
are just a few of those names.

Evercore ISI

On the “Backsliders” list are Verizon Communications VZ,
+0.54%,
AT&T T,
-0.12%,
Union Pacific UNP,
-2.91%
and Lockheed Martin LMT,
+0.17%,
to name a few.

Evercore ISI

So far for Monday it’s dollar up.

Hear from Ray Dalio at the Best New Ideas in Money festival on September 21 and 22 in New York. The hedge fund pioneer has strong views on where the economy is headed.

The markets

It’s not just stock futures ES00,
-0.69%

YM00,
-0.73%

NQ00,
-0.70%.
Oil CL.1,
-2.62%
down, while bitcoin BTCUSD,
-4.90%
and Ethereum ETHUSD,
-3.91%
prices are particularly hard hit, after the latter’s so-called “merger” last week. Bond yields TMUBMUSD02Y,
3.931%

TMUBMUSD10Y,
3.471%
climbing, while gold prices GC00,
-0.58%
is off

Best of the web

The usual heroes invited to the Queen’s funeral.

Losing a macro hedge fund gives investors the chance to exit, recoup some losses.

Nobel Prize-winning economist Peter Diamond says workers have the power.

China tells citizens not to touch foreigners over monkeypox threat.

The buzzing

Some 2,000 global dignitaries, along with perhaps a billion people worldwide, watched the funeral of Queen Elizabeth II. For those who missed it, here are key moments and details from the final farewell to Britain’s beloved monarch. And check out our live blog roundup.

The sentiment index from the National Association of Home Builders is available after the market opens in a week, which will see plenty of data on the sector, with existing home sales and housing starts. Apart from the Fed decision on Wednesday, the end of the week will bring PMI data for September.

A hacker claiming to be behind the recent Uber UBER
-3.62%
data breach may have leaked dozens of gameplay videos of the upcoming “Grand Theft Auto VI” video game from Take-Two interactive’s TTWO,
-3.30%
Rockstar games.

President Joe Biden declared the pandemic over in a Sunday interview, surprising some of his health advisers. He also said the US would defend Taiwan against a China invasion.

The chart

Zoom Video Communication ZM,
-1.91%,
was not only a “poster child” for stocks hitting new lows on the Nasdaq, “but one of the biggest leading indicators of where the market is going in general,” said Michael Kramer, the founder of Mott Capital Management.

The video conference group that rallied during the pandemic made a new low on Friday and “probably isn’t done falling either, with the next significant support at $76.45 and then $70.”

Here is his chart and full blog post.

Mott Capital

The tickers

These are the top searched tickers as of 6 a.m. Eastern Time:

Typist

Security name

TSLA,
-0.13%

Tesla

GM,
+0.10%

GameStop

AMC,
-9.11%

AMC Entertainment

BBBY,
-8.76%

Bed Bath & Beyond

AAPL,
-1.10%

appeal

NIO,
-6.32%

NIO

HKD,
-19.82%

AMTD Digital

MONKEY,
-9.26%

AMC Entertainment preferred stock

CHPT,
-6.65%

ChargePoint Holdings

AMZN,
-2.18%

Amazon.com

Random reading

Queuing actually. Couple meet while waiting to see Queen.

Farmer finds beautiful Mosaic from the Byzantine era while planting olive trees.

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