As we start to select potential stocks for the summer it is useful to see how the various US sectors have performed so far in 2015. We can see some of the winners and losers in our own results but it is useful to view it across all the sectors broadly, even those sectors where we have less exposure.
In addition to looking at US performance, it is useful to review performance of some economies where we have stock selections, notably Canada (many banks, utilities) and Australia (banks and natural resources). These stocks seem to be doing reasonably well on their own exchanges, down 3-5%, when denominated in local currency.
However, when these results are converted into US dollar terms, they look much worse. For a while the Canadian and Australian dollars were near “parity” with the greenback… since then they have fallen significantly.
It is important to take into account sector performance and the US dollar vs. specific other companies currencies. These elements are very impactful, along with the individual stocks selected. You can always pick a stock that will go far above or below the trends of its sector and / or currency, but in general these are strong forces and most sector and country selections have a solid correlation in terms of outcomes.