Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (66359)	10/3/2025 1:53:01 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 67642

Multinationals race ahead as dollar slump divides US stock market Domestically focused companies lag behind as greenback suffers worst year since early 2000s Stocks such as Meta Platforms, Philip Morris and Applied Materials are all outperforming the S&P 500 index © Gonzalo Fuentes/Reuters Multinationals race ahead as dollar slump divides US stock market on x (opens in a new window) Multinationals race ahead as dollar slump divides US stock market on facebook (opens in a new window) Multinationals race ahead as dollar slump divides US stock market on linkedin (opens in a new window) Share Save Pro Features Configuration current progress 85% Kate Duguid in New York Published31 minutes ago 1Print this page Get ahead with daily markets updates. Join the FT's WhatsApp channel Multinationals and exporters are outshining companies more geared to America’s domestic economy, as the weak dollar becomes a dividing line for the US stock market. A Goldman Sachs index of the 50 blue-chip US companies with the highest share of foreign sales exposure has jumped 21 per cent this year and hit a fresh high on Thursday, with stocks such as Meta Platforms, Philip Morris and Applied Materials all outperforming the S&P 500 index. In contrast, the bank’s gauge of Wall Street shares with the greatest proportion of domestic sales — which includes T-Mobile US and Target — has gained just 5 per cent, as such companies failed to reap the benefit of a weaker dollar while also being hit by the steeper cost of imports. The gap between the two indices this year is the widest since 2009. “The weak dollar gives you a turbo boost,” said Steven Englander, head of global G10 FX research at Standard Chartered, referring to the tailwind for US stocks with foreign sales this year. The US currency is on course for its worst performance in a calendar year in more than two decades, dropping nearly 10 per cent against a basket of major currencies so far in 2025 as Donald Trump’s trade and economic policies cause global investors to rethink their exposure to the world’s largest economy. Many have chosen to hedge their holdings of US assets by betting against the dollar, while falling interest rates have added further pressure on the currency. Wall Street analysts are predicting further losses given the Federal Reserve has signalled at least one more rate cut this year. A weaker greenback boosts a US company’s foreign earnings in dollar terms, while also making American goods cheaper abroad. Domestically focused companies do not tend to benefit, and those firms that rely on buying goods from overseas in foreign currency face higher input costs. “Small companies that import goods?.?.?. will suffer and large companies with global reach and capacity to access finance will manage the impact,” said Shahab Jalinoos, head of G10 FX strategy at UBS. “For companies selling products outside the US, it’s a windfall, particularly if they’re not importing vast amounts of product.” The moves are proving a tailwind for some technology giants, many of which generate a significant share of their revenues overseas. On its second-quarter earnings call in July, Microsoft’s chief financial officer Amy Hood said that, if exchange rates remained stable, the firm expected currency effects to increase revenue growth by “approximately 2 [percentage] points” next year, according to an AlphaSense transcript. Some firms may be downplaying the positive effects of currency moves, according to Englander. He said: “You hear about currency effects more often when the dollar strengthens and companies blame the strong dollar for losses. But management rarely says ‘we got bailed out by currency effects’.” The divergence will probably become more visible as third-quarter earnings season gets under way, say analysts. “There are a subset of companies that will benefit more than others,” said George Pearkes, a macro strategist at Bespoke Investment Group, who cited tech giants among the businesses in line for a boost from the weaker currency, and utilities and banks among domestic-facing firms that would be hurt by it. Some analysts say the pain may ultimately be muted. If the dollar’s decline is driven by looser monetary policy, then that could end up supporting economic growth and many companies’ earnings. In such a scenario, the weak dollar “starts out where it is a bit of a concern, but then at a certain point you get to the stimulative effects of easy money”, said Scott Chronert, an equity strategist at Citi.