This year’s decline in the U.S. dollar is drawing investors back into a practice that they had eschewed for some years: Borrowing the greenback to buy riskier assets in what is known as a carry trade.
A number of investors are pursuing higher returns by buying overseas assets. Investment firm Ashmore Group, for instance, sold the dollar to add local-currency government bonds from Mexico, Indonesia and Brazil to its portfolios, according to Jan Dehn, head of research.
The dollar is being used to fund such trades after a drop in U.S. interest rates this year made it less attractive for investors to hold dollar-denominated assets. With the Fed pledging to keep U.S. rates near zero for the foreseeable future, it may stay that way for a while.
Below, some of the best analysis and insight from WSJ writers and columnists, the Dow Jones Newswires team and occasionally beyond, on investing, the wealth-management business and more.
Where Trump and Biden Stand on Job Creation, Workplace Safety, Wages: The winner of the presidency will face a U.S. labor market that is still recovering from a pandemic-induced shock that ended a decade of job growth.
U.S. Retail Bankruptcies, Store Closures Hit Record in First Half: Retail bankruptcies, liquidations and store closings in the U.S. reached records in the first half of 2020 as the Covid-19 pandemic accelerated industry changes, particularly the shift to online shopping, according to a report.
PLANNING & INVESTING
Gold’s Record High Gives New Life to Dollar Doomsayers: Although gold’s detractors through the ages are numerous and prominent, including the likes of Warren Buffett and John Bogle, the events of this year are giving new life to those who insist the arc of financial history points toward the inevitable debasement of currencies like the dollar.
From Dow Jones Newswires
With tourist numbers falling and potential new restrictions to contain the coronavirus, it is looking increasingly likely that the Spanish economy will contract once again in 4Q, says Jessica Hinds, Europe economist at Capital Economics. There is a serious risk that the economy’s rebound during the third quarter could reverse over the next three months, with new restrictions particularly affecting Madrid, which accounts for a fifth of national GDP, she says. (firstname.lastname@example.org)
Accelerating online sales spell good news for L’Oreal, says J.P. Morgan Cazenove, predicting positive effects on both profit and valuation at the French cosmetics group. Predicted online growth of around 40% by 2022 will not only drive revenue upwards, but will also mean disproportionately higher earnings before interest and tax, JPM Cazenove says. Acceleration of online sales furthermore opens up plenty of room for L’Oreal to increase in value, says the U.S. investment bank, which has the stock at overweight. (email@example.com)
BUSINESS & PRACTICE
LVMH’s Determination to Fight Tiffany Raises Deal Stakes: The French luxury company has come up with a third legal argument for breaking its contract with the jeweler.
How Investors Can Profit From the Fight Against Fossil Fuels: Growing green ambitions in Brussels will likely make European carbon credits more expensive for companies but more profitable for investors.
Black, Female and Head of a Public Real-Estate Company. Meet the Only Person to Fit That Description: Leslie D. Hale, a Harvard graduate who worked at Goldman Sachs and GE Capital, has led RLJ Lodging Trust for two years.
TRAVEL & LIFESTYLE
‘Roadschooling’ 101: Families Make Remote Learning Work in an RV: Logging in to online school while on the road poses tech challenges: calls get dropped, teachers glitch out.
The Wealth Adviser Briefing covers topics of interest to wealth managers, financial planners and other advisers. The content is curated by the Dow Jones Newswires team using articles from the Newswires, Barron’s, MarketWatch and The Wall Street Journal. The briefing is delivered to subscribers by email each workday morning at 6:30 a.m. ET. You can sign up here for email delivery.
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