(Harvest) Movement in the U.S. dollar can be a headwind or a tailwind for earnings of U.S.-based companies. A company’s sensitivity depends proportionately on how much business it conducts internationally. In the chart below, we can see that, aggregately, firms in sectors such as Information Technology and Materials generate more than 50% of their revenue internationally and are therefore more sensitive to currency movements. On the other hand, companies in the Telecommunication Services and Utilities sectors, which are heavily exposed to the domestic market, tend to be relatively immune.
How a Strengthening U.S. Dollar Affects Equity Returns
This entry was posted in Syndicated. Bookmark the permalink.
