The Wednesday Briefs 177 – 19 July 2023

THIS WEEK: US Dollar Decline; Budget Deficits; The Largest Inheritance in History; The Non-Mainstream Media; San Francisco; Microsoft; S&P Sectors Update.

US DOLLAR DECLINE

The US dollar as measured by the DXY dollar index is nearly back to its pre-pandemic level. The dollar index (chart) weakened soon after the start of the pandemic between May and December 2020, then soared from May 2021 to September 2022, and fell back in the last quarter of 2022. Recently, it broke further to the downside as traders became convinced that inflation had been vanquished and that the Fed was almost done with rate hikes.

The dollar's decline is a net positive for US exporters since it makes their goods and services more competitive in the global marketplace. It also brings some relief to emerging markets where many governments and companies borrowed in dollars. In theory, a weaker dollar can be a negative for European exporters, but this turn has not been reflected in their stock prices so far. Luxury giant LVMH for …