The traditional balance of payments identity does not take into account changes in asset prices and exchange rates.
For example, the value of external assets or liabilities can change due to higher or lower stockmarket prices or a default/write-off on debt.
The value of assets and liabilities denominated in the home currency will not be affected by changes in the exchange rate.
The appreciation of asset prices, referred to as "positive valuation effects" in this case exactly offsets the current account deficit.
At the end of the day, the country's net foreign asset position remains unchanged, despite the $700 billion current account deficit.