One of the big headwinds of 2022 that helped push stock prices lower is turning into a tailwind that should help power the stock market higher in the second half of the year, according toThat tailwind is a weakening US dollar, which according to a Monday note from Lee, should help lift profit margins for US multinational companies over the next two to three quarters.
The US Dollar Index, which measures the dollar against a basket of foreign currencies, has declined by 13% from its September high of about 115 to just under 100 today. The decline representsaccording to a recent note from Fairlead Strategies, suggesting that the weakness could persist. And while second-quarter results are likely to be the worst quarter for year-over-year comparisons, based on current Wall Street estimates, they should represent the bottom and rebound in the third quarter.