The End of the U.S. Dollar’s Bull Run?

In this episode of "Thoughts on the Market," Paul Walsh, along with Marina Zavolock and James Lord, discusses the implications of the weakening U.S. dollar on the European stock market. James Lord outlines the reasons for a structurally bearish outlook on the dollar, citing slowing U.S. growth and policy uncertainties. Marina Zavolock explains how this dollar weakness impacts European companies, noting that while some sectors like utilities and real estate benefit from euro strength, more than half of the European index faces negative exposure. The discussion also covers the importance of hedging strategies for companies to mitigate FX risks, with advanced hedging programs often leading to outperformance and lower share price volatility. The speakers highlight that while European earnings growth may appear weak in local currency terms, it shows a more positive picture when viewed in dollar terms, emphasizing the need for investors to consider currency impacts when comparing European and U.S. growth.