Business Blog: Dollar Hits 3-Year Low

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Scientists in China have developed an early-screening method that detects Parkinson's with 94% accuracy from subtle changes in the scent of earwax.

TL;DR

RFK Jr. targets Big Pharma's $10B ad budget
IPOs are back — but the best companies are staying private
Dollar hits 3-year low as investor confidence slips
Newsletter exclusive: how a $28 toy became China's most coveted export

Pharma Stocks Dip as RFK Jr. Pushes to Rein In Drug Ads

U.S. Health and Human Services Secretary RFK Jr. wants to make it harder and more expensive for pharmaceutical companies to advertise directly to patients.

His proposals include requiring longer, more detailed risk disclosures in ads, making them costlier and less effective, and removing the tax deductibility of ad expenses for drugmakers.

Drug advertisements work: A study from USC found that regions with higher ad exposure saw a 6% increase in prescriptions, 70% of which were new.
Pfizer and AbbVie, two of the biggest pharma advertisers, fell 1.7% and 2.3%, respectively, on the news.

RFK Jr.'s primary obstacle will be the First Amendment. U.S. courts have consistently ruled since the 1970s that commercial speech, including pharma ads, is protected. He'll also have to fight an army of lobbyists: The pharmaceutical industry was the top spender on Capitol Hill last year, dispensing close to $400 million.

These policy changes wouldn't just affect drugmakers: Pharma ads made up 10% to 12% of total U.S. TV ad revenue last year. Losing that spend would pressure TV networks already in decline.

This would probably be the last nail in the broadcast TV industry's coffin. Big picture, this feels like a gift to Alphabet and Meta. That $10 billion in pharma ad spend isn't going away. It'll just get reallocated to digital. Expect a wave of content marketing and native advertising on Instagram and YouTube. The industry will find new ways to push the same products, just with better targeting and lower CPMs. So while this might be good for public health, it's definitely bad for cable and great for tech.

Wall Street's IPO Comeback Has a Quality Problem

After three sluggish years, the IPO market is showing signs of life.

93 U.S. companies have priced offerings this year, up 45% from the same time last year.

Shares are surging: First-day pops are hitting their highest levels since early 2021, with several deals doubling on debut.

This may make for good headlines, but it's not necessarily indicative of long-term quality. Nearly 90% of IPOs that jumped over 100% on their first day of trading went on to deliver negative returns over the next three years. Big first-day surges are often fueled by momentum and hype, not healthy market fundamentals.

Case in point: Waves of IPOs that double on day one have coincided with market tops — a phenomenon that occurred during the dot-com boom and again in 2021, when frothy conditions drove average first-day gains to 40% (the average first-day gain last year was 15%).

The takeaway? There's a difference between activity and quality. IPO volume may be rising, but many of the strongest companies, like SpaceX, ByteDance, and Stripe, are still staying private.

Until top-tier firms decide that public markets are worth the scrutiny, this rebound looks less like the start of a new cycle and more like a release valve for companies chasing cash.

An IPO used to be a genuine financing event. Google went public because it needed to raise a billion dollars, and retail investors got to participate in the upside.

Now if a company still has room to grow, VCs keep it private and keep the gains. The only reason to go public is to off-load shares to less sophisticated retail investors and create buzz. Bankers underprice the offering to generate a big first-day pop, which works as a global branding campaign. That dilution is unnecessary, and retail investors don't benefit anyway because they only get access after the pop. I got into Airbnb at $68 because I knew the team. When it opened, it was $146 per share, and it's now below that. Unless you are an insider or an institutional client of the underwriter, you are typically late to the party.

Yes, the IPO market is starting to recover — but I wouldn't invest in any of them. Circle is just a shell company that holds Treasurys and makes money from interest on government debt. CoreWeave exists only because Nvidia is one of their biggest investors and gives them priority access to GPUs. Klarna is just rebranded credit, and now they're seeing a spike in defaults because people are using it to buy things they can't afford. Gemini was sued for defrauding customers. These companies all feel like SPACs from 2021.

Meanwhile, the companies I'd actually want to invest in — OpenAI, SpaceX, Stripe, Databricks — are staying private because they can raise as much as they want without the headache of going public. So what we're left with are second-tier companies being handed off to retail investors, while the best ones remain reserved for wealthy insiders. That's a broken dynamic.

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Dollar Under Pressure as Confidence in U.S. Wanes

Since President Trump took office, the U.S. dollar has dropped more than 10% against major currencies, recently hitting a three-year low and tracking toward its worst first-half performance in decades. The combination of tariffs, tax cuts, and political pressure on the Fed is shaking investor confidence in the global reserve currency.

One of the clearest signs: Treasury yields and the dollar are moving in opposite directions. Normally, rising yields attract capital, strengthening the dollar. But in the wake of Trump's tariff announcements, yields rose on inflation fears while the dollar fell 3% in 10 days, a sign investors are reallocating capital abroad.

Bank of America found that global fund managers are more underweight the dollar today than at any point in the past 20 years.

Investors are shifting into other safe havens, such as the Swiss franc, the Japanese yen, and gold. The precious metal recently hit an all-time high and overtook the euro as the second-largest global reserve asset. A recent survey of more than 70 central banks found:

95% expect global gold holdings to rise over the next year.
Almost 75% expect a decline in U.S. dollar holdings over the next five years.

This doesn't just matter to currency traders. A long-term decline in global demand for the dollar would be consequential. Why?

Foreign investors hold about 30% of U.S. debt. When the dollar weakens, these investors lose more when converting their Treasury holdings back to their own currency. If the dollar keeps falling, these investors could sell their Treasurys to avoid further losses.

This would force the U.S. to raise interest rates — making borrowing more expensive for households, businesses, and the government. And if more of the budget goes to debt service, less is left for public investment or tax relief. One estimate suggests the dollar's reserve status allows the U.S. to carry 22% more debt than it otherwise could.

This would also translate into lower returns for investors. Per J.P. Morgan: De-dollarization (a reduction in the use of dollars) would likely mean U.S. assets underperform global peers, raising the cost of capital and reducing long-term equity returns.

I think the global reserve currency concern is overblown. The argument you often hear is that the dollar is down to 58% as a share of global currency reserves — but people aren't looking at the full timeline. When you do, you realize that yes, the dollar is down in the past 20 years, but compared with the last 30 years, or even the past 60 years, it's up. It was at 50% in the '80s and 50% in the early '60s.

The story of the dollar isn't a story of decline — it's a story of stability. It's gone up and down, but it's always been dominant.

We're still way ahead of all the other currencies in terms of our share of global reserves: There's still no viable alternative, despite what China and bitcoin maxis say.

The U.S. dollar has been the world's reserve currency for about 80 years, a role formalized through the 1944 Bretton Woods agreement. This means that most countries hold a large share of their savings in U.S. dollars, both as cash and in the form of U.S. Treasurys.

The dollar works as a reserve currency because it is liquid (easy to buy/sell at scale), safe (not likely to lose value), trusted (supported by stable institutions), and backed by a strong economy.

At its peak, 73% of global currency reserves were in dollars. Today, it's around 58%.

Countries acquire U.S. dollars through several channels, including running trade surpluses with the U.S. or in U.S. dollar-denominated trade, attracting foreign investment, and currency market operations.

Being the reserve currency offers significant benefits to the U.S., including:

U.S. businesses can trade globally in their own currency.
High demand for Treasurys keeps U.S. borrowing costs low.
It affords crisis insurance, since investors flock to the dollar in times of turmoil.
It provides geopolitical financial leverage, including the ability to enforce sanctions.

But there are trade-offs:

One of the primary ways countries acquire U.S. dollars is to earn them through a trade surplus. This effectively means the U.S. needs to run a persistent trade deficit if it wants the dollar to retain its share of reserves.
Strong demand for Treasury bonds drives up the value of the U.S. dollar, which makes U.S. exports more expensive abroad.
- A stronger dollar makes it harder for U.S. industry to compete with cheap products from countries like China.
Easy access to cheap borrowing can encourage overspending by the U.S. government.

Newsletter Exclusive: The $28 Toy Powering One of Asia's Best-Performing Stocks

China's most wanted export? Not rare earth metals, iPhones, or DJI drones. It's a snaggletoothed toy named Labubu.

Sales of the furry monster figurines, which retail for $27.99 in the U.S., have surged thanks to two million TikTok hashtags and shoutouts from Rihanna, Lisa of Blackpink and The White Lotus, and David Beckham. Demand is so intense that some fans have started smuggling dolls out of China.

Behind the craze is Pop Mart, Labubu's parent company, now one of the world's largest entertainment intellectual property firms. Its Hong Kong–listed stock is up almost 500% over the past 12 months, and the company is now valued at over $40 billion. In 2024, sales more than doubled to $1.8 billion, profits more than tripled, and international sales jumped from 15% to nearly 40% of revenue.

Part of Labubu's appeal comes from its "blind box" format — buyers don't know which version they'll get until they open the box. The surprise element fuels unboxing videos, driving virality, content creation, and a sense of scarcity that boosts demand.

Labubu may just be a weird little toy, but its viral rise exposes two important forces driving global consumer behavior.

Labubu sits at the center of the "kidult" boom. Adults now make up 28% of global toy sales, a segment growing nearly 10% annually. This trend is likely a reaction to increasing uncertainty. Research shows that in periods of collective stress (pandemics, economic volatility, etc.), people seek comfort in childhood relics. Following 9/11, the 2008 crash, and COVID-19, products that capitalized on nostalgia surged.

Cultural leadership is going global. Labubu isn't an isolated phenomenon; it's part of a larger shift away from Western pop culture dominance.

Hollywood is growing more risk averse, pursuing sequels and remakes that will draw audiences to the box office. From 2014 to 2023, sequels comprised 42% of box office hits, up from just 12% in the 1990s. Those looking for more original creativity are increasingly finding it in international content: Americans are consuming over 50% more internationally produced TV shows than they were five years ago.

It's not just entertainment:

In beauty, U.S. sales of Korean products jumped 53% YoY in Q1 2025. Globally, demand is five times higher than average.
In music, K-pop streaming on Spotify has increased more than 400-fold over the past decade.
In media, TikTok (owned by China's ByteDance) was the most downloaded app last year and continues to chip away at U.S. streamers.
In retail, Chinese platforms are surging: Temu controls 17% of the U.S. discount market; Shein posted $38 billion in sales last year and became the No. 1 fashion app in America.

The next global trend — whether in music, fashion, beauty, or entertainment — is just as likely to come from Seoul or Hong Kong as it is from Los Angeles or New York.

Netflix stock will face pressure over the next year. It's a great company, but the data is striking: YouTube now commands a larger share of video consumption than Netflix.

YouTube and TikTok's asset-light approach — no formal production budget, just user-generated content — is incredibly efficient. They're doing to Netflix what Netflix did to cable: delivering cheaper, more scalable content that's winning viewer attention.

Justin Wolfers, professor of public policy and economics at the University of Michigan, joins Ed to break down the GOP tax bill, weigh in on the economic toll of the ICE raids, and explain why tariff-driven inflation could be more damaging than typical inflationary pressures. Listen here.