U.S. dollar’s stubborn strength dents companies’ earnings cheer

  • 📰 globebusiness
  • ⏱ Reading Time:
  • 57 sec. here
  • 49 min. at publisher
  • 📊 Quality Score:
  • News: 190%
  • Publisher: 66%

Canadian News News

Canada News,Breaking News Video,Canadian Breaking News

Many are now facing an unexpected problem

A host of U.S. companies are faced with a problem they had not expected to confront this year: a rising dollar.

All told, every 10% year over year rise in the dollar shaves some 3% from S&P 500 earnings, according to estimates from BofA Global Research. The dollar’s gains are being fueled by U.S. economic strength, which is eroding expectations for how deeply the Fed will be able to cut rates this year. Investors are pricing in around 50 basis points of rate cuts for 2024, compared to more than 150 basis points forecast at the beginning of the year, futures markets show.

Not all S&P 500 companies are equally affected by the dollar’s swings. The information technology, materials and communication services sectors top the list with the most international revenue exposure, garnering as much as 57%, 52% and 48% of their total revenue respectively from abroad, data from FactSet showed.

Some firms that advise companies on managing FX risk noted a rise in hedging activity in recent weeks, though quieter currency markets have made hedging a less urgent issue for some companies even as the dollar has risen. In March, Deutsche Bank’s index of currency volatility fell to its lowest level since September 2021.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 31. in US

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Analysis-Dollar’s stubborn strength dents US companies’ earnings cheerA host of U.S. companies are faced with a problem they had not expected to confront this year: a rising dollar. Many market participants believed the dollar...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Analysis-Dollar’s stubborn strength dents US companies’ earnings cheerExplore stories from Atlantic Canada.
Source: SaltWire Network - 🏆 45. / 63 Read more »

Analysis-Dollar’s stubborn strength dents US companies’ earnings cheerA host of U.S. companies are faced with a problem they had not expected to confront this year: a rising dollar. Many market participants believed the dollar...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »