At first glance, the corporate profits data released today by the Commerce Department don’t look good. Profits fell by 0.8 percent in 2014 from the prior year, the first decline since the middle of the recession.
Below the surface, however, the weakness was concentrated in earnings from abroad. It’s the latest embodiment of the surge in the dollar as the U.S. recovery strengthens.
Profits originating outside the U.S. dropped by $36.1 billion in the fourth quarter, the biggest decrease since 2008 and the second-biggest since 2002. This would be money earned by big multinational companies, such as Coca-Cola Co. or Wal-Mart Stores Inc., as well as any business that sells goods and services abroad.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.