The U.S. currency stands near a 20-year high against a basket of its peers .DXY and is up 15.1% in the past year, lifted by a hawkish Federal Reserve and investors seeking shelter from turbulent markets.usdt接口平台（www.trc20.vip）是使用TRC-20协议的Usdt第三方支付平台,Usdt收款平台、Usdt自动充提平台。免费提供入金通道、Usdt钱包支付接口、Usdt自动充值接口、Usdt寄售回收。菜宝Usdt钱包一键生成Usdt钱包、一键调用API接口、一键出售Usdt。
NEW YORK: Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar.
The U.S. currency stands near a 20-year high against a basket of its peers .DXY and is up 15.1% in the past year, lifted by a hawkish Federal Reserve and investors seeking shelter from turbulent markets.
A strong dollar can be a headwind for U.S. companies as it makes exporters’ products less competitive abroad and hurts multinationals that need to convert their foreign profits back into the U.S. currency.
Each percentage point of year-on-year increase in the U.S. Dollar Index .DXY, which measures the dollar against six other currencies, translates to a 0.5 percentage point hit to S&P 500 earnings growth, analysts at MorganStanley estimated.
"You seemingly can't get a break right now. We're starting to get some relief from oil prices, but you've still got the dollar banging on you," said Bill Stone, chief investment officer at the Glenview Trust Company.
International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise.,
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Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation.
Investors are also awaiting what the Fed will have to say on those topics at its monetary policy meeting next week, at which it is widely expected to deliver another jumbo-sized 75 basis-point rate increase. Read full story
Overall, some 40% of S&P 500 revenues come from overseas, data from FactSet showed. Information technology leads all sectors with 58% of revenues derived internationally, followed by materials with 56%, while utilities companies source just 2% of their revenues out of the United States, according to FactSet.
The dollar’s strength threatens to combine with high inflation, supply chain issues and other factors to weigh on earnings, analysts said.
“The rate of change on the dollar exhibits a strong negative correlation over time vs. S&P 500 earnings revisions. USD strength comes at an inopportune time for corporates already facing margin pressure and increasingly weaker demand,” Morgan Stanley’s analysts wrote.
So far, 5.1% of the S&P 500 companies that have reported their second quarter results have posted earnings above expectations, nearly half the average of 9.5% over the prior four quarters, according to Refintiv data.ag区块链百家乐声明:该文看法仅代表作者自己，与本平台无关。转载请注明：telegram中文群组（www.tg888.vip）:Wall St Week Ahead-Strong US$ looms over US earnings season