Reuters / Paulo Whitaker
- The US dollar has been surprisingly strong this year amid Federal Reserve tightening and escalating global trade tensions, but Goldman Sachs says it's due for a big reversal.
- The firm identified 14 companies it expects to outperform the broader market as this shift gets underway.
The US dollar surprised everyone this year.
Most of Wall Street expected it to be weaker versus its global counterparts, but it has instead surged 7.4% since January, according to the Federal Reserve's trade-weighted measure.
A big part of that is the Fed's monetary tightening, which comes at a time when other global central banks are still employing far looser policies. And any chances for a reversal have been thwarted in recent months amid mounting trade tensions.
Goldman Sachs
A strong dollar is problematic for multinational companies that rely heavily on exports. But by that same token, there's great value in knowing which companies fall into that category, in the event of a dollar reversal. If and when the greenback heads lower, the stocks of those firms could get a big boost.
That's where Goldman Sachs comes in. They maintain an index of companies who get a large percentage of their sales internationally.
And wouldn't you know it, Goldman is also forecasting a 7% decline in the trade-weighted dollar over the next 12 months - suggesting that the components of that index are about to get a whole lot more attractive. ...
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