Why the Dollar is Slipping and Navigating What’s Actually Moving Markets with Karen Finerman
Apr 21, 2025
44:16
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Quick takeaways
Consumers are increasingly relying on credit cards due to rising grocery prices and inflation, raising concerns about potential debt accumulation.
Investors should focus on long-term strategies and consider undervalued stocks like Amazon and Meta amidst current market volatility and a declining dollar.
Deep dives
Rising Grocery Prices and Credit Card Usage
In the current economic landscape, consumers are experiencing a significant rise in grocery prices, prompting increased reliance on credit cards. Many individuals, despite not regularly consuming certain staples like eggs, are feeling the pinch of inflation reflected in their shopping bills. With more people turning to credit cards for everyday purchases, there is a growing concern about potential debt accumulation. This highlights the importance of accessing credit options like the Chime Credit Builder Card, which helps users manage their finances without accruing high-interest debt.
Market Adaptation Strategies
Amid fluctuating economic conditions, experts emphasize the need for investors to adapt to the new normal rather than react to daily news fluctuations. A consistent strategy, focusing on long-term investments rather than attempting to time the market, is often seen as more beneficial despite recent market volatility. The VIX, measuring market volatility, is used as a barometer for fear and greed in investment decisions, where buying opportunities arise during high volatility. Investors are encouraged to buy when valuations drop, for long-term financial stability.
Understanding the Value of the Dollar
Currently, the U.S. dollar is facing a significant decline, noted as being near three-year lows, which is unusual compared to typical crisis behaviors where the dollar typically gains strength. This shift suggests a flight from traditional safe-haven assets like U.S. treasuries, resulting in rising yields instead of the expected opposite. Factors such as overseas selling of U.S. bonds and a reevaluation of global investments contribute to this scenario. The healthy valuation differentials between U.S. equities and foreign markets are driving capital away from U.S. investments, raising concerns about the dollar's future as the global reserve currency.
Opportunities Amidst Market Uncertainty
Despite the current economic challenges, several high-quality investments are perceived as being undervalued, providing a tempting buying opportunity. Companies like Amazon and Meta are highlighted as attractive options given their strong market positions and solid performance fundamentals, even amidst market turmoil. The broader financial sector, including stocks like Citigroup, remains attractive, buoyed by management changes aimed at improved profitability and operational efficiency. By focusing on companies with strong balance sheets and a capacity to weather economic storms, investors can strategically navigate through periods of uncertainty.
After a whirlwind of headline whiplash over the last month, last week in the economy felt... quieter. But quieter doesn’t mean unimportant. Instead of chasing breaking news, we’re settling into the “new normal”—whatever that ends up meaning in this cycle. So what do investors need to know now that the dust has (somewhat) settled? To help answer that, Nicole is joined by Karen Finerman (CEO of Metropolitan Capital Advisors, founding panelist of CNBC’s Fast Money, and host of How She Does It). They dive into the current state of the dollar, what tariffs could mean for your money, and Karen’s best-performing stock pick of 2025 so far.
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