A stronger U.S. dollar is providing a serious headwind to earnings and that is likely to intensify over at least the remainder of 2013. This makes US stocks at peak valuations unattractive for investment.
“We’re seeing a lot of high-level names already report the effect of a strong dollar,” said Kathy Lien, BK Asset Management managing director. “We’ve got Coca-Cola saying that, and Johnson & Johnson. IBM said revenues were down 3 percent, but would only be down 1 percent if it weren’t for currency effects.”
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