#-ad_banner-#The rapid surge in the dollar has thus far had little impact on the stock market. But it soon will. In the upcoming earnings season, you’ll be hearing a lot about how many companies in the S&P 500 are having a tough time racking up sales in their foreign subsidiaries. And when you consider that few expect the dollar to pull back any time soon, this trend is likely to persist for at least the rest of 2015. As we’ve noted in the past, larger companies tend to have much greater global exposure than smaller companies. And in the face… Read More
#-ad_banner-#The rapid surge in the dollar has thus far had little impact on the stock market. But it soon will. In the upcoming earnings season, you’ll be hearing a lot about how many companies in the S&P 500 are having a tough time racking up sales in their foreign subsidiaries. And when you consider that few expect the dollar to pull back any time soon, this trend is likely to persist for at least the rest of 2015. As we’ve noted in the past, larger companies tend to have much greater global exposure than smaller companies. And in the face of rising global sales challenges, you would think large cap stocks would be losing favor. Yet the S&P 500 has actually outperformed the Russell 2000 (a small-cap index) over the past 13 months. The simple explanation: global uncertainty tends to lead to a “flight to quality” as larger companies are generally seen as safer investments. Yet as Q1 earnings season will likely show, these aren’t “quality” times for big companies. That’s why I am focusing my research these days on small-cap stocks. A number of individual stocks in the Russell 2000 are now trading far from their 52-week high,… Read More