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Dow Jones Industrial Average (tailwind)

Dow Jones Industrial Average (tailwind & support)

Remember: The weaker dollar could boost the earnings growth of US-multinationals and commodity-companies even more! (Reminder: TAX-Refom impact on earnings will also follow "soon"). Furthermore: The 38days-Moving-Average is signaling...

Dow Jones Industrial Average (EMA 38-days) a guideline for the moment.

With the latest drubbing, strategists have been taking a look at the impact of the slumping dollar on corporate profits, and it could provide a nice windfall. The U.S. Dollar index is falling for several quarters now.

"The buck should boost, not bite," said Sam Stovall, chief investment strategist at CFRA. "In the fourth quarter, we're going to see a reverse image of the preceding year. While the buck took a bite out of earnings last year, it should boost them now for the recent year (2017)."

Analysts say the companies most likely to feel the impact of a weaker dollar are those with the most exposure overseas, as well as commodities-focused companies since the dollar weakness pushes commodities higher. Foreign sales accounted for 42.3 percent of 2016 revenues of S&P 500 companies, down from 44.3 percent the year earlier and the lowest percentage since 2003, according to Standard & Poor's.

In the overview above one can clearly detect the sectors which should profit the most from the big slide of the USD in the last quarters (Energy, Information Technology and Materials being the three "frontrunners" in this category).

A final remark on one of the components (companies) of the Dow Jones Industrial Average - BOEING:

To show the strength of the global business world let's read what Boeing's Randy Tinseth just recently had to say: there was "no drama, no surprises, we just delivered on what we said we were going to do" meeting guidance of 760 to 765 deliveries.

"If you look at the entire aircraft industry, it's predicted to make USD 34bn of profit this year," he said. "In the past three years it has made more profit - about USD 100bn - than in the 30 years before," Mr Tinseth said.

I (Ralph Gollner) think the last two paras tell us a lot !