U.S. dollar strength isn't why some companies' quarterly earnings will be weak

المملكة العربية السعودية أخبار أخبار

U.S. dollar strength isn't why some companies' quarterly earnings will be weak
المملكة العربية السعودية أحدث الأخبار,المملكة العربية السعودية عناوين

The dollar may be a convenient whipping boy, but the blame game is hardly a profitable investment strategy.

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“ We hardly ever hear about companies whose bottom lines have been helped by foreign currency fluctuations. ”

Take the third quarter of 2022, during which the U.S. Dollar Index DXY enjoyed its strongest quarter since 2016, rising more than 7%. In the earnings season for that quarter, according to FactSet, 50% of S&P 500 firms SPX argued in their earnings calls that the stronger dollar had a negative impact. A more objective analysis comes from measuring the correlation between quarterly and yearly changes in the DXY and the S&P 500’s earnings-per-share. Based on quarterly data since 1985, the correlations are so weak as to not satisfy standard levels of statistical significance. I reached the same conclusion when analyzing correlations between the dollar and the S&P 500 itself.

Questions to ask during earnings season Financial analysts should ask tough questions of a CEO if during the company’s earnings call the U.S. dollar gets blamed for causing a disappointing quarter.

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المملكة العربية السعودية أحدث الأخبار, المملكة العربية السعودية عناوين

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U.S. dollar strength isn't why some companies' quarterly earnings will be weakU.S. dollar strength isn't why some companies' quarterly earnings will be weakThe dollar may be a convenient whipping boy, but the blame game is hardly a profitable investment strategy.
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