Cash In On The Crashing Dollar: 5 Stocks And ETFs Ready To Soar From The Greenback's Downfall
Portfolio Pulse from Piero Cingari
The U.S. dollar index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF (UUP), has dropped below the key 100 mark due to softer-than-expected consumer and producer inflation. This has led to a decrease in bets of more than one rate hike by the Federal Reserve this year. The dollar's value has dropped 4% since the beginning of the year and 13% from its all-time high in September 2022. This could benefit U.S. exporters, multinational corporations, and emerging markets, but could also lead to inflationary pressures and decreased purchasing power. Five stocks and ETFs that could benefit from a weaker dollar include Procter & Gamble (PG), McDonald’s (MCD), Caterpillar (CAT), Exxon Mobil (XOM), Newmont Corporation (NEM), Pacer US Export Leaders ETF (PEXL), iShares J.P. Morgan USD Emerging Market Bond ETF (EMB), VanEck Gold Miners ETF (GDX), Energy Select Sector SPDR Fund (XLE), and Invesco CurrecyShares Euro Currency Trust (FXE).
July 13, 2023 | 5:28 pm
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POSITIVE IMPACT
Caterpillar (CAT) could benefit from a weaker dollar as it generates 53% of its revenues outside of North America.
A weaker dollar could increase the value of Caterpillar's earnings when they are repatriated, potentially boosting the company's profits.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
iShares J.P. Morgan USD Emerging Market Bond ETF (EMB) could benefit from a weaker dollar as it offers exposure to U.S. dollar-denominated government bonds issued by emerging market countries.
A weaker dollar could make it less expensive for emerging-market countries to repay or service their debt in U.S. dollars, potentially boosting the value of the bonds that the EMB ETF is exposed to.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Invesco CurrecyShares Euro Currency Trust (FXE) could benefit from a weaker dollar as the fund seeks to track the performance of the euro.
A weaker dollar could increase the value of the euro, potentially boosting the value of the FXE ETF.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
VanEck Gold Miners ETF (GDX) could benefit from a weaker dollar as it provides exposure to publicly traded companies worldwide involved primarily in gold mining.
A weaker dollar could increase the demand for gold, potentially boosting the value of the companies that the GDX ETF is exposed to.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
McDonald’s (MCD) could benefit from a weaker dollar as a sizable amount of its earnings come from outside the U.S.
A weaker dollar could increase the value of McDonald’s earnings when they are repatriated, potentially boosting the company's profits.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Newmont Corporation (NEM) could benefit from a weaker dollar as it makes gold more appealing, driving up the price of the metal.
A weaker dollar could increase the demand for gold, potentially boosting Newmont Corporation's profits.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Pacer US Export Leaders ETF (PEXL) could benefit from a weaker dollar as it offers exposure to U.S. companies that rank within the top 10% in the country in terms of foreign sales.
A weaker dollar could increase the value of the earnings of the companies that the PEXL ETF is exposed to when they are repatriated, potentially boosting the ETF's value.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Procter & Gamble (PG) could benefit from a weaker dollar as it generates the majority of its revenue outside of North America.
A weaker dollar could increase the value of Procter & Gamble's earnings when they are repatriated, potentially boosting the company's profits.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Energy Select Sector SPDR Fund (XLE) could benefit from a weaker dollar as it offers exposure to companies in the oil, gas, consumable fuel, and energy equipment and services industries.
A weaker dollar could increase the demand for energy, potentially boosting the value of the companies that the XLE ETF is exposed to.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Exxon Mobil (XOM) could benefit from a weaker dollar as oil is traded in U.S. dollars on international markets, making oil barrels more affordable to buyers.
A weaker dollar could increase the demand for oil, potentially boosting Exxon Mobil's profits.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) tracks the U.S. dollar index (DXY), which has dropped below the key 100 mark. This could potentially impact the ETF's performance.
The UUP ETF tracks the U.S. dollar index, which has dropped significantly. This could lead to a decrease in the ETF's value.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100