The euro is crashing while the dollar strengthens to record highs. Here's what to know.
Happy Friday eve, readers. Phil Rosen here in New York.
All you market watchers are in for a currency treat — the dollar and euro are nearing a one-to-one equivalence for the first time in about two decades. That means traveling the continent is unusually cheap for Americans right now.
But what's happening isn't some random occurrence. It's a result of a series of events that fell in line for us to find ourselves talking about parity today.
Buckle up.
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1. The euro has slumped but it could fall another 10%, Societe Generale said Wednesday. The weight of Europe's energy crisis and the European Central Bank's bond-rout response are pulling down the common currency.
That all makes the euro "unbuyable" right now, as the shared currency dropped another 1% yesterday, moving below $1.02 for the first time since November 2002.
SocGen's chief currency strategist pointed to Russia's gas pipeline as one potential pain point.
"Europe's energy dependency on Russia is falling, but not fast enough to avoid recession if the pipeline is closed. If that happens, EUR/USD will likely lose another 10% or so," he wrote.
In that scenario, the euro could even sink below parity to 0.9 against the dollar, according to a portfolio chief at BlueBay Asset Management speaking in a Bloomberg interview yesterday.
Compared to the dollar, traders remain wary of the euro because the European Central Bank hasn't raised interest rates as aggressively as the Federal Reserve — which has contributed to a strengthening dollar.
"It could be a very long winter," the money manager said as the euro notched a fresh 20-year low.
In other news:
2. US stock futures rise early Thursday, after the Federal Reserve reiterated its commitment to tackling inflation. Meanwhile, GameStop shares jumped as much as 11% in premarket trading, after the company announced a four-for-one stock split in the form of a dividend. Here are the latest market moves.
3. On the docket: Levi's, Seven & i Holdings Co. Ltd., and Helen of Troy Ltd., all reporting. Plus, look out for the goods and services trade balance, expected to be released by the Bureau of Economic Analysis at 7:30 am ET.
4. A value fund manager who's beaten 93% of his peers over the last five years laid out the pillars of his stock-picking strategy. Andy Fleming has helped guide his fund to massive success — and he said these are the three companies he's betting on right now.
5. China isn't interested in ramping up fuel exports amid the ongoing global energy crunch. Beijing called for 40% lower quotas for state and private refiners compared to last year, according to a Bloomberg report. Here's what you want to know.
6. A veteran market strategist said oil, lumber, and copper are key commodities that are all signaling a recession is likely to hit this year. Strategist Joe Terranova told CNBC that people shouldn't be having conversations about the downturn that could come in 2023 — but the one that could come in 2022.
7. Michael Burry of "The Big Short" is predicting higher long-term inflation. The famed investor expects a post-pandemic shake up of global supply chains to get underway, as well as a chronic shortage of manual workers. Burry also anticipates weaker consumer demand and bloated retail inventories to stem short-term inflation.
8. A real estate investor who's financially independent has a 22-unit rental portfolio. There are three main financial benefits to investing in multi-family homes, Dana Bull explained. Their massive upside explains why she calls them "triple-headed monsters."
9. These growth stocks are set to succeed in any market landscape, according to this portfolio manager who routinely beats out competing funds. In the last 15 years, Ian Mortimer's firm has bested 99% of its rivals. Here's his list of four growth stocks that he says can win in any environment.
10. Job openings fell again through May as the hiring recovery carried on. The US saw 11.3 million job openings, according to JOLTs data published Wednesday. That signals the labor shortage is easing as the nation nears pre-crisis employment levels.
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Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn).
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.