WEAK DOLLAR MAY BE THE EARNINGS BOOST REQUIRED TO KEEP THE MARKET LEVITATED LONGER?
The U.S. dollar, down 8 percent this year, will probably weaken further, according to Morgan Stanley.
That’s primarily good news for American stock investors. The greenback may finish 2017 down 13 percent, handing S&P 500 companies a 6.5 percent boost to their rolling 2018 per-share estimates, Morgan Stanley analysts including Michael Wilson said in a note July 24.
Even if the dollar stays where it is now, they’ll get a 4 percent earnings bump.
The U.S. Dollar Index has had the weakest start to a year since 2002 amid political uncertainty at home and concern that economic stimulus will be pared in Europe.
The measure declined 2.3 percent in the past 10 trading days. Morgan Stanley calls it “exceptionally and unexpectedly weak.”