Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Copper Tip Energy Services
Hazloc Heaters
Copper Tip Energy
Hazloc Heaters


Goldman Likes Foreign-Exposed Tech, Energy Names as Dollar Falls


English Español 简体中文 हिन्दी Português
These translations are done via Google Translate

By Joanna Ossinger

(Bloomberg)Investors betting on continuing dollar weakness should consider U.S. technology and energy stocks among those with high international sales that tend to outperform when the currency falls, according to Goldman Sachs Group Inc.

Shares of U.S. firms with high revenue exposure to Western Europe and the BRIC countries — Brazil, Russia, India and China — also fare well in weaker-dollar environments, wrote strategists including David Kostin in a note Friday. Goldman’s FX strategists see the trade-weighted dollar depreciating by more than 5% over the next 12 months, they said.

“During months when the trade-weighted dollar fell by at least 1.25%, the international-facing information technology and energy sectors have performed best while the more domestic-facing consumer discretionary sector has performed worst,” they wrote. “When the dollar weakens, investors should favor firms with a larger share of revenues generated abroad.”

U.S. stocks with international exposure have outperformed with weak dollar

The dollar fell to its lowest since January on Friday as investors bet the Federal Reserve will remain accommodative in its policy when it meets this week, and the economic health of the rest of the world would pick up relative to the U.S., as coronavirus cases continued to climb there. Investors are now lining up to short the greenback.

GLJ
Sky Eye Measurement
GLJ
Sky Eye Measurement

The Goldman strategists also found that purchases of U.S. equities by foreign investors increase when the dollar weakens, in an analysis of data going back to 1980. Goldman expects foreign investors to buy $300 billion of American stocks this year.

“A weakening U.S. dollar has historically been the biggest catalyst for foreign investor demand for U.S. stocks,” they said.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE