International Revenues Making an Impact

When the dollar is in decline, companies that generate the bulk of their revenues overseas benefit as the weak dollar attracts purchases of US-made products by foreign companies and consumers. The most recent stock market rally/dollar decline this month has been led by companies that generate a big portion of their revenues outside of the US, which has been characteristic of the entire bull market as well.

When breaking the S&P 500 into deciles (10 groups of 50 stocks) based on the amount of sales that companies generate overseas, the deciles of stocks with high international revenues have outperformed during the November rally, while the two deciles of stocks with very little or no international revenues have significantly underperformed.(Click to enlarge)