The US dollar (DX = F, DX-Y.NYB) has risen over the past six months and the rapid increase has so far influenced a whole series of business profits.
Companies ranging from Big Tech-Kolossen to brands on consumers aimed at consumers, in both their results from the exchange rate in both their results and the future guidelines, have a trend that could previously warned trend.
“In addition to recent US dollar strength, the share of S&P 500 companies that mention FX has risen in 4Q win calls,” Goldman Sachs analyst David Kostin wrote in a memorandum to customers last week.
Historically, a strong dollar has adverse consequences for companies that do most of their affairs abroad, because this leads to slower sales and profit growth over time as a result of unfavorable currency versions.
Until then, Megacap Tech generates a considerable amount of income abroad. Apple (AAPL) reported approximately 58% of the total turnover of international sales in the most recent quarter. And the percentage of overseas sale of other beautiful seven players such as alphabet (Googl), Microsoft (MSFT), Tesla (TSLA) and Meta (Meta) arrived at around 50% or higher for all 2024.
Almost all of those companies have issued warnings for the power of the dollar in their respective income expenses and calls. Even Amazon (Amzn), which generated a little more than 23% of sales in the last quarter, reported a headwind of around $ 900 million from the foreign exchange in Q4, “about $ 700 million higher than we expected.”
As a result, the e-commerce Gigant said that the turnover of the first quarter should grow only between 5% and 9%, which could possibly be the slowest quarter of revenue growth in its history.
“This guidance anticipates an unusually large, unfavorable impact of approximately $ 2.1 billion or 150 basic points, from exchange rates,” the company said in the profit -release.
But it is not only technology companies that feel the impact.
McDonald’s (MCD) said it expected: “Strange currency will be a full year of a headwind until 2025 profit per share.” Coca-Cola (KO) gave comparable guidelines, predicted similar EPS-percentual growth “with a currency from 6% to 7%,” while Johnson & Johnson (JNJ) predicted a $ 1.7 billion hit in the turnover of $ 1.7 billion.
The positive price promotion of the Greenback is largely powered by two main catalysts: the elections of Trump and the subsequent Republican Sweep, together with the Hercalibration of future FED supply in the light of strong economic data.
After reaching a low point in September, the US Dollar Index, which measures the value of the dollar in relation to a basket of six foreign currency (the euro, Japanese yen, British Pond, Canadian dollar, Swedish Krona and Swiss Franc) , more than 7% and floats near the two -year highlights that it achieved in January. Since the election, the index has risen by around 4%.
