The strong dollar has wiped billions of dollars off the second-quarter sales of US companies, prompting many to cut their guidance for the remainder of the year.
The list of bellwethers stomaching multi million- or billion-dollar hits has grown by the day after the US currency surged to its highest level in 20 years this month, including IBM, Netflix, Johnson & Johnson and Philip Morris. That group is expected to swell as titans of the technology industry such as Apple and Microsoft — which generate a substantial portion of their business outside of the US — release quarterly results in the coming days.
The currency shock has muddled an earnings period that was being closely studied for signs of a weakening global economy, as high inflation and tighter monetary policy weigh on business and consumer demand. Economic data are already signalling a pullback in activity, as inflation cuts into consumers’ real spending power.