Bloomberg Daybreak: Europe Edition
Dollar Pain Hits Investors, Tariff Supply Shock, Defense Takeover Targets
Apr 28, 2025
18:06
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Quick takeaways
- Investors are facing significant losses due to declines in both the dollar and S&P 500, prompting a shift towards hedging strategies.
- Private equity firms are increasingly optimistic about European defense investments, spurred by rising military spending and anticipated M&A activity.
Deep dives
Investors Seek Protection from Dollar Weakness
Investors who previously capitalized on buying dollars to invest in US stocks are now facing significant losses as the dollar and the S&P 500 have both seen declines. The simultaneous drop has led to a rapid shift in investor sentiment, prompting many to seek protective measures against further dollar depreciation. For instance, Bank of America has indicated that a return to pre-pandemic hedging levels could lead to an additional $5 trillion in foreign US equity exposure being hedged. This shift highlights the changing landscape of global investments and the need for adaptive strategies in response to currency fluctuations.
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