President Trump isn’t the only one who wants a weaker dollar

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President Donald Trump isn’t the only one who wants a weaker US dollar.

The currency’s strength has hung over this corporate earnings season. For multinational companies, it makes exports lose their competitive edge. Earnings made abroad also lose value when converted back to dollars.

Among those calling out the problem: Nike, Mattel, Johnson & Johnson and Apple.

Nick Raich, CEO of research firm The Earnings Scout, tells me that a strong dollar has probably shaved up to 2% off profits from S&P 500 companies this quarter.

Why you should care: About 40% of US corporate revenues come from outside the country, per Raich. That exposure is great since it spreads risk around, but it can have downsides.

What’s next: Companies are betting that the dollar will start to weaken as the Federal Reserve moves ahead with more rate cuts and US growth slows.

“We think the dollar is … towards the end of a strong cycle, and hence, we think that we’re in for a benign environment over the next year,” Coca-Cola finance chief John Murphy told analysts last month.

But that’s far from a sure bet. Bank of America Merrill Lynch pointed out in a report this week that “the US economy is still comparatively strong.” Plus, weak global economic data means other countries are likely to keep cutting rates alongside the Fed. That could keep the dollar strong relative to other currencies.

“We suspect that the necessary conditions for a durable USD weakening trend to emerge may not yet be in place,” the bank’s analysts said.

Investor insight: Potential currency intervention by the Trump administration remains a wild card. My CNN Business colleague Matt Egan in New York has more on what that could look like here.

China’s tiny rate cut isn’t the end

Beijing signaled Tuesday that it could take bigger steps to boost China’s flagging economy after unveiling what amounted to the slimmest of rate cuts on new loans for companies, per my CNN Business colleague Laura He in Hong Kong.

“There is room for us to cut interest rates,” Liu Guoqiang, deputy governor of the People’s Bank of China, told reporters Tuesday. “Whether we do it or not depends on the economic growth and price conditions.”

Background: Over the weekend, China announced a change to its interest rate system designed to give the struggling corporate sector more support.

But China’s central bank “still has more work to do,” according to Julian Evans-Pritchard, senior China economist for Capital Economics. “While this should nudge banks to reduce lending rates slightly, the impact on economic activity will be marginal,” he said in a report Tuesday.

Big picture: China’s economy has slumped to its slowest pace of growth in nearly three decades, stymied by unsustainable debt levels, a shift from industry to consumption and the escalating trade war with the United States. The question is whether policymakers are doing enough to reverse course.

Twitter, Facebook and Hong Kong disinformation

Big Tech has a new and high-stakes battleground over disinformation: the pro-democracy protests in Hong Kong.

What happened: Twitter said Monday that it had taken down more than 900 accounts originating in China that were “deliberately and specifically attempting to sow political discord in Hong Kong, including undermining the legitimacy and political positions of the protest movement.” Facebook said it had dismantled seven pages, three groups and five accounts.

Twitter also said that it would no longer accept advertisements from state-controlled media outlets. “We want to protect healthy discourse and open conversation,” the company said.

Why it matters: Social media companies have battled disinformation campaigns from Russia and Iran, among other countries. But this is the first time they’ve pointed the finger at China, which has long been a minefield for Silicon Valley.

Coming up

More retail earnings could shine a light on US consumer spending. Home Depot, Kohl’s and TJX will share results before US markets open. Urban Outfitters follows after the close.

Coming tomorrow: Fed minutes for July, US existing home sales and Target earnings.

Coming Thursday: How is Germany’s manufacturing sector holding up? The Bundesbank has flagged concerns and warned of a possible recession.