By coinnews 
00:00 Speaker A
Talk to me about which companies might stand to benefit from a weaker dollar this earning cycle.
00:06 Speaker B
It’s great to be here. Um, and certainly, you know, that, that dollar story has, I think, a little bit further to run, and we’re seeing a little bit of strength today, but I think that’s really month end flows. Now, when you look at the impact on, on the corporate world, um, it is of course those that are more externally focused that are going to be most vulnerable to these moves that we’re seeing. I think when you’re thinking about the tariff story in general, we can divide the corporate world into those that are more domestically focused and those that are more international in nature. And that’s likely to come out in, in the earnings data that we see coming up from not just the first quarter, but throughout this year.
00:57 Speaker A
One thing I’ve been hearing a lot is that the dividend paying stocks tend to benefit from that weaker dollar. To what extent do you think that that is a big enough lift for some of those names versus just, sure, it’s a cherry, but it’s not really going to change the story.
01:12 Speaker B
Yeah. I mean, I think in general, that the dollar story isn’t going to be the main driver of earnings at this juncture, right? We’re seeing huge shifts when it comes to consumer confidence. That’s likely to play out in terms of those consumer companies, I think, are going to be the real focus of earnings season simply because that is the more forward-looking indicator as to how the tariff are going to impact the, the growth story of the US because that’s one thing we need to keep in mind constantly, and that is that the US is a consumer-driven economy. And what the consumer does is really the, the fate of economic growth going forward.
02:00 Speaker A
Yeah, that’s true. And I think that that’s a great point too, considering that international markets have a different sector makeup. I think people forget all the time that, you know, the biggest sector in the European markets is banks. It’s not tech, even though tech dominates our lives over here. So, Christian, I have a question on the, you know, on like a more major asset allocation perspective because one thing that we think a lot about, about it, Ritholtz is how to prepare our investors for an environment where US exceptionalism is fading, you know, very, very slowly, but still, um, you know, a trend to watch. How quickly do you see this happening? What are you seeing in your world in terms of demand for US assets and where it’s going?
02:54 Speaker B
Yeah, I mean, I think that’s the, the top question at the moment, right? And I think there’s a, there’s a few elements here, and I think there are a few misreads that we’re seeing. So, when we talk about the, the unwind of the dollar trade, we need to remember that it was such a consensus trade for, for so long. And this legacy position is starting to unwind, and it probably does have further to go. But we’re coming from extremes. Um, I think the other story is of course, when you think about currencies, it’s always, always a relative story. And what we’ve seen in Europe is a huge shift, taking off the fiscal breaks, a huge surge in spending that resulted in this mass repricing of, um, of, of the euro. So it makes sense that we’re seeing a little bit of dollar weakness. Now, the idea of US exceptionalism fading, that certainly seems to be the narrative at the moment, but I do think we need to bear in mind that moving away from the dollar is not something that will the world can do in the short term. It’s not something that can happen easily. Yes, we may be seeing policies in place that are encouraging countries to look elsewhere, but it is so deeply ingrained. When you look at demand for dollars outside of the US, it’s around 10 times the availability of dollars, and it’s still the lifeblood of finance, the lifeblood of trade. So while yes, we are seeing a bit of weakness, we’re seeing correlations in US assets, whether it’s equities and, and the US dollar have increased and, and gone back into positive territory. Yes, we can continue to see this for a bit, but this is not the death of the dollar, not by a long stretch.