Don't just focus on the storm caused by the strong US dollar: Will these stocks have opportunities on a global scale?
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发表于 2024-4-25 19:55:26
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Their arsenic, my honey. For an increasing number of non US economies around the world, a strong US dollar has become a "big trouble", and many emerging markets have even encountered a "stock exchange double kill" as a result. However, while a strong US dollar appears to be reaping global benefits, at least one group seems to benefit from it - those companies that export heavily to the world's largest economy
Industry insiders have stated that companies with substantial US dollar earnings will benefit greatly, mainly from heavyweight Asian chip manufacturers and European industrial and pharmaceutical companies. According to a set of statistics from Goldman Sachs Group, the stock prices of companies that exported a large amount to the United States this year outperformed the overall performance of non US markets.
George Maris, Chief Investment Officer of Global Equities at Principal Asset Management, said in an interview, "Exporting companies to the United States not only benefit from currency conversion, but also have a trade advantage as a result. Whether it's exporters from Europe, Japan, or China, they should be able to show a significant increase in profit margins."
As the US economic data continued to perform better than expected this year, interest rate market traders continued to delay their bets on the first Fed rate cut, and the US dollar rose against almost all major currencies this month. Especially against the Japanese yen, the US dollar has now risen above the 155 level, which was previously seen by the outside world as a red line that could trigger intervention from the Japanese authorities.
In fact, in terms of trade, the biggest loss in the current context of the appreciation of the US dollar may actually be caused by American export companies. It's no wonder that US presidential candidate Trump fiercely criticized his presidential rival, current President Biden, for "letting the appreciation of the US dollar go" this week. On the 23rd, Trump posted on social media that the record low yen to dollar exchange rate was a disaster for the United States, citing reasons that were unfavorable for US exports.
Although some global exporters have also been selling in a risk averse environment recently, many strategists point out that they may be at the forefront of any rebound wave, as the 12 month earnings per share changes of Asian (excluding Japan) and European exporters often synchronize with the trend of the US dollar.
Do these Asian companies have opportunities?
Industry insiders say that it is expected that the companies that benefit the most from the strong US dollar will all appear in Asia.
TSMC may become one of the best among them. Nearly two-thirds of the company's revenue comes from the United States, and it achieved its first profit growth in a year in the first quarter of this year, despite lowering its expectations for future expansion. Since the beginning of this year, TSMC has accumulated a 32% increase in the local market.
Daniel Blake and other strategists at Daimler wrote in a client report this month that many Japanese stocks have a correlation coefficient above 0.8 with the USD/JPY exchange rate, including Toyota Motor, Mitsubishi UFJ Financial Group, and Japanese energy company Inpex Corp.
The strengthening of the US dollar and the impact of the US economic recovery on exporters will help boost their stock prices.
European exporters will also benefit
In the European market, many industry insiders have stated that European pharmaceutical and luxury goods companies are also expected to benefit from the appreciation of the US dollar, which is one of the industries most closely related to the strengthening of the US dollar.
Laurent Douillet, senior stock strategist at Bloomberg Intelligence, said, "Danish weight loss drug manufacturer Novo Nordisk will naturally be an advantageous company because its production is mainly concentrated in Europe, and its largest sales market is in the United States."
Librarum Capital strategists Joachim Klement and Susana Cruz also wrote in a report that the appreciation of the US dollar and increasing market risk aversion may lead to stronger performance for European companies that primarily rely on making money outside of Europe, as seen in 2019, 2020, and 2022.
According to Liberum's analysis, British industrial companies such as Ashhead Group Plc and Rentokil Initial Plc, as well as Dutch biotech company ArgenX SE, may be one of the main beneficiaries, with at least 70% of their revenue coming from the United States.
The overall non US market will continue to be under pressure
However, although a stronger US dollar may benefit non US exporters, it is clearly not a good thing for the overall market performance of non US countries.
According to regression analysis by Jingshun Asset Management, for every 1% increase in the US dollar index, the monthly return rate of MSCI Global (excluding the US) stock index will decrease by 0.2%.
"Generally speaking, when the US dollar strengthens, I expect (non US) funds to flow out. Cyclical industries such as basic resources, consumer companies, and finance may perform poorly," said David Chao, strategist at Jingshun Asset Management in Singapore
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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