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US Open: Seeking safety in tech stocks and the dollar, WFH till January, Dollar strength

As Wall Street eagerly awaits Fed Chair Powell’s moment at Jackson Hole, most of the downbeat delta variant driven headlines suggest he may wish to tap the breaks before joining the hawkish members in starting the tapering of its asset purchases.  Investors are ramping up protection in Treasuries and in technology stocks.  The 10-year Treasury yield continues to hover around 1.25%, while the dollar holds onto this week’s gains against the euro.

The S&P 500 index is finishing a poor trading week on a high note as some investors remain committed to buying US stocks on every dip.

Return to office delays

Both Apple and Charles Schwab will delay return to office efforts until early next year, a sign that surging delta variant cases are derailing some reopening trades.  Apple also temporarily closed a store in South Carolina after more than 20 employees were exposed to or tested positive for COVID-19. 

Charles Schwab also delayed the full return to the office until January and also announced a 5% pay increase for employees. 

Work-from-home flexibility might prove to be a worthwhile strategy for corporations as many parents will likely have to deal with classroom closures for their unvaccinated children due to COVID cases that arise during the school year(classrooms will temporarily close and go remote until cases clear). A return to normal for many workers is not happening in September, nor is it likely to happen this fall. 

FX

The dollar is poised to have the best winning streak in nearly two months.  The greenback has been boosted on strong demand for Treasuries, an unwind of commodity trades, and slowing growth expectations.  The next big move for the dollar will likely occur after Fed Chair Powell signals whether he is joining the hawks in setting up a taper announcement next month or slow them down.  Given the risks to the outlook, he may choose to wait a month before deciding.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya [4]

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya