Dollar Stabilizes Near Recent Lows — Market Talk

1336 ET - The WSJ Dollar Index stabilizes around a multi-month low as markets juggle resilient data and the Treasury's plan to increase its long-term bond purchases. The S&P U.S. Composite PMI rises to 56 in August from 54.5 in July, indicating activity growth is accelerating. Treasury yields recover from lows reached earlier this week after the buyback announcement, but not enough to boost the greenback. The WSJ Dollar Index slips 0.2% to 95.31, after touching 95.25 earlier, which was its lowest since May. The greenback weakens slightly against the yen and the euro, while strengthening 0.1% versus the Swiss franc. ([email protected]; @ptrevisani)1159 ET - Consumer resilience in Canada may have run its course amid an early estimate that retail sales fell in July, Oxford Economics says. Retail-sales volumes in June rose a hearty 1.5% in June, Statistics Canada reports, beating market expectations. Still, "we expect consumer outlays to grow at a softer pace in H2 amid a weak labour market, shrinking population, and sticky gasoline prices," says the firm's economist, Michael Davenport. ([email protected]; @paulviera)1036 ET - Bitcoin has gained nearly 25% this week, but may have finally encountered a price point that's too high in the short-term at $80,000. Bitcoin spiked at $79,258 overnight, and has since retreated to around $77,000. It's a new near-term resistance level, serving as both a psychological and technical resistance point, says Lacie Zhang of Bitget Wallet. "A clean daily or weekly close above $80,000 would likely shift attention to the $82,000 to $84,000 supply area next," says Zhang. If bitcoin retreats back toward $70,000, that "would suggest this was more of a fast positioning squeeze than the start of a durable new leg." Bitcoin is up 5.5% to $76,685, according to LSEG data. ([email protected])1012 ET - Statistics Canada's early estimate on July retail sales — a 0.8% month-over-month drop — indicates that consumer strength has waned with gas prices on the upswing, says Thomas Ryan, economist at Capital Economics. Gas prices rose in July following the resumption of U.S. military attacks on Iran. That increase "has already taken the steam out of spending," Ryan says. He adds consumer spending is likely to continue slowing, and should calm any worries among Bank of Canada policymakers about any overheating of the Canadian economy. ([email protected]; @paulviera)0942 ET - Bitcoin ETFs have had a net inflow exceeding over $1 billion in the past two days, according to data from CoinGlass. With a net inflow of $606.3 million on Thursday, it's now $1.61 billion in net inflows reported over the past four days. This week has seen a resurgent appetite in cryptocurrencies, thanks to more attention coming from the Trump Administration and actions from the Treasury Department resurrecting the "dollar debasement" trade. It's a change from the trading that has dominated the crypto space all summer. "The current Bitcoin bear market is getting a little long in the tooth," says Zach Pandl of Grayscale Research in a note. Bitcoin spiked over $79,000 overnight, and was recently up 5.8% to $76,865. ([email protected])0936 ET - Roots has agreed to go private in a buyout deal that TD Cowen analyst Brian Morrison calls the best offer the apparel retailer is likely to receive. Roots, a household brand in Canada, has agreed to be acquired by a consortium led by Marquee Brands and JM&A Design & Development for C$4.10 a share. This represents a 36% premium to its price right before Roots announced a strategic review in March. Morrison says that given that the company has undertaken "what we view as a full auction process," and the current proposal has the backing of its board, among other support, "we see a high probability of the transaction closing as proposed" in 4Q. The analyst downgrades the stock rating to sell from hold as a result. ([email protected])0933 ET - BJ's Wholesale Club posts comparable-club sales growth of 3.1% in 2Q, excluding gasoline sales. "The comp was driven by a healthy balance of traffic and ticket, and we delivered for our members when it mattered most, including during events like the World Cup and America 250," CEO Bob Eddy says on a call with analysts Friday. BJ's perishables, groceries and sundries division notches comparable-sales growth of 2.8%, led by grocery, with Eddy noting particular strength in beverages and active nutrition. Meanwhile, the company's general merchandise and services division reports comp growth of 5.3%, led by consumer electronics and homegoods. Shares climb 2.7%. ([email protected])0926 ET - The prospect of lower interest rates boosts bitcoin, according to 21Rates. The crypto information firm says in a note that falling borrowing costs also cheapen bitcoin-backed loans. "Many bitcoin lending platforms price their floating-rate products against Fed funds or SOFR benchmarks," 21Rates says. "A sustained compression of long-end yields, if it continues, would mechanically reduce the rates borrowers pay on platforms like Arch and Coinbase Credit over time." Long-dated Treasury yields decline from multiyear highs as the government plans to increase its long-term bond buybacks. Bitcoin rises 6%. ([email protected]; @ptrevisani)0922 ET - Canada retail sales rose by a solid 0.6% in June. But the significant takeway from Statistics Canada's June retail report is that momentum through 2Q appears to have stalled in July, says Andrew Grantham, economist at CIBC Capital Markets. The data agency's early estimate for July indicates a 0.8% month-over-month drop on a nominal basis. Grantham says the result for July will likely be weaker on a volume, or price-adjusted, basis, given that gasoline prices rose in the month alongside a resumption of U.S. attacks targeting Iran. For 2Q, Statistics Canada reports retail-sales volume rose by 0.4% nonannualized. ([email protected], @paulviera)0918 ET - BJ's Wholesale Club CEO Bob Eddy says the K-shaped economy persists, though he notes some sequential improvement during the recent quarter. "We drove comp growth across all income cohorts, which is encouraging, and our value proposition continues to resonate broadly," he says on a call with analysts. "That said, the vast majority of our growth continues to be driven by our higher income members, which is consistent with what we've seen for some time now." Eddy says BJ's job is to make sure it has the right products at the right value for every member, given consumers remain discerning with their dollars. Shares climb 1.7% premarket. ([email protected])0910 ET - Bitcoin finding its highest levels since May is reshaping how investors are evaluating overall markets. "This year's quiet patch in crypto never reflected a loss of belief in the asset class," says Nigel Green of deVere Group in a note. "It reflected liquidity being pulled elsewhere, into an overheated AI and semiconductor trade." The timing of this while bitcoin has been stuck in rangebound trade all summer is creating the explosive movement, Green adds. "Every one of those pressures is now easing at the same time, and Bitcoin is repricing accordingly." Bitcoin is up 6.2% to $77,194, according to LSEG data. Ethereum rises 2.9% to $2,385, XRP is up 10.8% to $1.37, and solana is up 3.7% to $90.76. ([email protected])0905 ET - BJ's Wholesale Club is winning over customers at the gas pump, as prices remain elevated across the country. The warehouse club chain says comp gallons were up double digits during the latest quarter, marking an acceleration from 1Q and serving as "a clear signal of the share we continue to take," CEO Bob Eddy says on a call with analysts. "Gas prices are about as visible as it gets for consumers," he says. "There's a price on every street corner, and our members know that we offer great value." Eddy says that strong volume growth, coupled with a favorable pullback from peak gas prices, drove fuel profit dollars ahead of expectations and meaningfully contributed to the company's overall results. Shares climb 1.5% premarket. ([email protected])