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CNBC
5 days ago
- Business
- CNBC
These stocks could be winners if Trump devalues the U.S. dollar, according to Jefferies
Stocks with large amounts of overseas revenue and strong pricing power could outperform if the U.S. engineers an effective dollar devaluation as part of White House trade talks, according to Jefferies. The greenback has already slipped around 7% on the year, and although there doesn't appear to be a blatant catalyst to drive it further lower — Jefferies Global head of FX Brad Bechtel predicts a major regime change ahead. Specifically, Bechtel believes that a tacit agreement worked into trade negotiations with China could drag the USD down 15%. "An agreement — particularly with China — to weaken the USD could result in its first prolonged devaluation in 20Y+," he wrote in a recent note. "This would increase the competitiveness of U.S. exports, bolster U.S. manufacturing and potentially lift the Chinese consumer by aiding domestic consumption." "In short, this is more of a win-win solution than a diligent and protracted trade deal process," Bechtel added. To that end, in the same note Jefferies analysts shared some stocks that could win big if the U.S. dollar does end up devaluing. These stocks all have the following characteristics: Revenue with significant overseas exposure, especially to China Considerable direct competition that is foreign domiciled Potential for pricing power as a commodity-driven business or service In the health care sector, Jefferies singled out life sciences stock Danaher as a winner should the greenback continue to weaken. Shares of Danaher have tumbled 18% this year, but the price target of $230 is approximately 22% above the stock closed on Monday afternoon. Jefferies currently has a buy rating on the company. The bank also singled out Repligen as a potential winner, although Jefferies sees the stock currently as a hold. "We view DHR and RGEN as particularly well positioned and note that both companies also have considerable ex-U.S. revenue exposure (~55% each)," Jefferies wrote. Meanwhile, in the consumer sector buy-rated Nike has a leg up over its peers, Jefferies said. "We think NKE is poised to benefit from improving trade balances both with China and Globally," the bank wrote. "We forecast 52% of NKE's revenues will come from International for FY'25, with 15% coming from Mainland China specifically. The value of these revenues will increase as the USD devalues." Jefferies added: "Additionally, if the Euro and the CHF continue to appreciate, this can further increase NKE's competitiveness considering its key peers — Adidas, Puma and On — are European companies." Shares of Nike have stumbled 17% in 2025. Jefferies' $115 price target is 83% above where the stock closed on Tuesday. Netflix, another name Jefferies has a buy rating on, has surged 36% this year. The stock closed at $1,211.51 could rally another TK% to Jefferies' $1,200 per share price target. "A weakened USD should support NFLX on reaching the high-end of its FY25 rev guide of $43.5-44.5B," the bank wrote. "It would also benefit its industry leading operating margins, giving it further earnings/FCF available for content investment vs. peers."
Economic Times
26-05-2025
- Business
- Economic Times
Rupee ends slightly higher; importer dollar bids, yuan's slip erode early gains
The Indian rupee closed modestly stronger after hitting a two-week high on Monday as a turnaround in the dollar index weighed on regional peers like the Chinese yuan, which touched a seven-month peak earlier in the day. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian rupee closed modestly stronger after hitting a two-week high on Monday as a turnaround in the dollar index weighed on regional peers like the Chinese yuan, which touched a seven-month peak earlier in the rupee closed at 85.0.850 against the U.S. dollar, up 0.1% from its close at 85.2125 in the previous currency had risen to 84.79 before trimming gains, as the dollar edged higher against major peers and importer demand emerged above the 85 level, traders dollar index was little changed at 99 after hitting an over month-low of 98.6 in early trading. The offshore Chinese yuan, meanwhile, was last quoted down 0.1% at 7.18 per U.S. dollar.U.S. President Donald Trump's trade policy reversals, as well as his sweeping spending and tax-cut bill currently in legislation, have weighed on the appetite for U.S. assets and the dollar, by extension."It's a very EM positive environment, and I don't see any reason why that will stop in the near-term," said Brad Bechtel, global head of foreign exchange at pointed out that the dollar could be exposed to steeper losses if China allows the yuan to start moving substantially Asian currencies have risen by as much as 7% on the month so far, the offshore yuan's gains are lower at about 1.4% and the Indian rupee is a laggard with a 0.6% fall over India's benchmark equity indexes closed higher by about 0.6% each on day, tracking gains in most regional country's benchmark 10-year bond yield eased slightly with analysts expecting the downtrend in bond yields and overnight index swap rates to persist on expectations that the central bank will infuse further liquidity and lower interest rates.
Time of India
26-05-2025
- Business
- Time of India
Rupee ends slightly higher; importer dollar bids, yuan's slip erode early gains
The Indian rupee closed modestly stronger after hitting a two-week high on Monday as a turnaround in the dollar index weighed on regional peers like the Chinese yuan, which touched a seven-month peak earlier in the day. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian rupee closed modestly stronger after hitting a two-week high on Monday as a turnaround in the dollar index weighed on regional peers like the Chinese yuan, which touched a seven-month peak earlier in the rupee closed at 85.0.850 against the U.S. dollar, up 0.1% from its close at 85.2125 in the previous currency had risen to 84.79 before trimming gains, as the dollar edged higher against major peers and importer demand emerged above the 85 level, traders dollar index was little changed at 99 after hitting an over month-low of 98.6 in early trading. The offshore Chinese yuan, meanwhile, was last quoted down 0.1% at 7.18 per U.S. dollar.U.S. President Donald Trump's trade policy reversals, as well as his sweeping spending and tax-cut bill currently in legislation, have weighed on the appetite for U.S. assets and the dollar, by extension."It's a very EM positive environment, and I don't see any reason why that will stop in the near-term," said Brad Bechtel, global head of foreign exchange at pointed out that the dollar could be exposed to steeper losses if China allows the yuan to start moving substantially Asian currencies have risen by as much as 7% on the month so far, the offshore yuan's gains are lower at about 1.4% and the Indian rupee is a laggard with a 0.6% fall over India's benchmark equity indexes closed higher by about 0.6% each on day, tracking gains in most regional country's benchmark 10-year bond yield eased slightly with analysts expecting the downtrend in bond yields and overnight index swap rates to persist on expectations that the central bank will infuse further liquidity and lower interest rates.
Yahoo
26-05-2025
- Business
- Yahoo
Rupee ends slightly higher; importer dollar bids, yuan's slip erode early gains
By Jaspreet Kalra MUMBAI (Reuters) -The Indian rupee closed modestly stronger after hitting a two-week high on Monday as a turnaround in the dollar index weighed on regional peers like the Chinese yuan, which touched a seven-month peak earlier in the day. The rupee closed at 85.0.850 against the U.S. dollar, up 0.1% from its close at 85.2125 in the previous session. The currency had risen to 84.79 before trimming gains, as the dollar edged higher against major peers and importer demand emerged above the 85 level, traders said. The dollar index was little changed at 99 after hitting an over month-low of 98.6 in early trading. The offshore Chinese yuan, meanwhile, was last quoted down 0.1% at 7.18 per U.S. dollar. U.S. President Donald Trump's trade policy reversals, as well as his sweeping spending and tax-cut bill currently in legislation, have weighed on the appetite for U.S. assets and the dollar, by extension. "It's a very EM positive environment, and I don't see any reason why that will stop in the near-term," said Brad Bechtel, global head of foreign exchange at Jefferies. Bechtel pointed out that the dollar could be exposed to steeper losses if China allows the yuan to start moving substantially higher. While Asian currencies have risen by as much as 7% on the month so far, the offshore yuan's gains are lower at about 1.4% and the Indian rupee is a laggard with a 0.6% fall over May. Meanwhile, India's benchmark equity indexes closed higher by about 0.6% each on day, tracking gains in most regional peers. The country's benchmark 10-year bond yield eased slightly with analysts expecting the downtrend in bond yields and overnight index swap rates to persist on expectations that the central bank will infuse further liquidity and lower interest rates.
Reuters
26-05-2025
- Business
- Reuters
Rupee ends slightly higher; importer dollar bids, yuan's slip erode early gains
MUMBAI, May 26 (Reuters) - The Indian rupee closed modestly stronger after hitting a two-week high on Monday as a turnaround in the dollar index weighed on regional peers like the Chinese yuan, which touched a seven-month peak earlier in the day. The rupee closed at 85.0.850 against the U.S. dollar, up 0.1% from its close at 85.2125 in the previous session. The currency had risen to 84.79 before trimming gains, as the dollar edged higher against major peers and importer demand emerged above the 85 level, traders said. The dollar index was little changed at 99 after hitting an over month-low of 98.6 in early trading. The offshore Chinese yuan , meanwhile, was last quoted down 0.1% at 7.18 per U.S. dollar. U.S. President Donald Trump's trade policy reversals, as well as his sweeping spending and tax-cut bill currently in legislation, have weighed on the appetite for U.S. assets and the dollar, by extension. "It's a very EM positive environment, and I don't see any reason why that will stop in the near-term," said Brad Bechtel, global head of foreign exchange at Jefferies. Bechtel pointed out that the dollar could be exposed to steeper losses if China allows the yuan to start moving substantially higher. While Asian currencies have risen by as much as 7% on the month so far, the offshore yuan's gains are lower at about 1.4% and the Indian rupee is a laggard with a 0.6% fall over May. Meanwhile, India's benchmark equity indexes closed higher by about 0.6% each on day, tracking gains in most regional peers. The country's benchmark 10-year bond yield eased slightly with analysts expecting the downtrend in bond yields and overnight index swap rates to persist on expectations that the central bank will infuse further liquidity and lower interest rates.
