You don't need a weatherman to know which way the wind blows. That's how I feel after listening to a deluge of conference calls where all you seem to hear is endless whining about strong dollar headwinds. Bob Dylan was so right; it's become all too obvious who isn't going to make the quarter and who is. You don't need an analyst to tell you where the number cuts are going to come from. The answer, my friend, is blowing in the currency headwind caused by the relentlessly strong dollar.
And then you get on the almost entirely domestic UnitedHealth (UNH) conference call and you don't hear about headwinds. You hear about secular tailwinds, like managing cost controls and outcomes, you hear about a retreat from a regime that was dictated by the Affordable Care Act issues ¿ yes, the government's involvement seems to be winding down now that the Act's in place. You hear no apologies or explanations. You just hear about how it was a great quarter and the next one will be even better. No wonder that stock led the Dow Jones Average yesterday.
But then you hop over to the American Express (AXP) call, the call of a company we would all argue has pretty consistent growth, and you've got gale force strong dollar headwinds. The call's a total weather report. It's almost as bad as IBM's (IBM) call. I say almost as bad because you had to batten down the hatches on a whole bunch of issues on the IBM call, but the dollar was still pretty front and center.
But then you go back over what we heard from Northern Trust (NTRS) and U.S. Bancorp (USB) -- they don't have the Subterranean Homesick Blues, they live here. Their businesses are strong. They aren't trading foreign currencies. I don't even know if they will take them! They aren't even being hurt that badly any more by the yield curve, and they can make it up in other forms of growth that are spurred by higher stock prices or cheaper energy.
Oh, and here's some truth. If you are in a real growth business, if you are in something that isn't competitive with others and is necessary to living -- like Netflix (NFLX) -- you don't have the headwinds either, even if you are overseas. You don't have comparisons that make the winds relevant. You don't need to be benchmarked by previous performance. Again, ideal.
And you don't have winds if you are in biotech, like Amicus (FOLD) and TG Therapeutics (TGTX), two smaller-cap biotech companies I talked to yesterday, which serve unmet needs of people throughout the globe and, again, aren't bound by currency issues.
Yes, here we are, just a few weeks into earnings season, and I have had enough of the weather.
Domestic's working. Breakthrough healthcare's working.
But a combination of Dylan's meteorological prowess and George Washington's admonitions from his Farewell address, where he asked why we should "entangle our peace and prosperity in the toils of European ambition," seem, after this raft of conference calls in the last 24 hours, to make an awful lot of sense to me.
It's becoming too hard, at least from what now seem like lofty levels, to feel at all confident about these international behemoths. The headwinds have finally blown the edifice over; if you don't want to get hurt, you have to stay indoors. Or at least, indoors in America.