All of the sudden, the market appears to be finding a formidable foe in the U.S. dollar.
Companies as varied as Hewlett-Packard, Discovery Communications, Home Depot, Fossil, Goodyear Tire and Wal-Mart have complained or warned of "currency headwinds" in their earnings calls over the last month alone.
Oracle can now be added to that list. In its Tuesday evening call, co-CEO Safra Catz remarked on "unusually high volatility in exchange rates," and stated that "currency headwinds" were a 6 percent drag on revenue growth.
And unlike many events that companies call extraordinary when they need to assign blame for unattractive numbers, the dollar rally has truly been something to behold. Steven Englander, global head of G-10 FX strategy with CitiFX, found that this has been the dollar's biggest rally in the last 40 years (and quite possibly the last 80) on a trade-weighted basis.
The scary thing is that the earnings and guidance impacts may just be getting started.
"The Street doesn't slash revenue or earnings numbers just because a currency is moving—even the dollar," noted Nicholas Colas of ConvergEx in a memo to clients. "There are clearly more cuts to come."
Analyst behavior may accentuate this late cutting, he added. "Analyst will shift their earnings estimates to later quarter to avoid cutting full-year numbers. That means we could be looking at revenue and earnings revisions lower for much of 2015."
The relationship between the dollar and stocks is not always adverse. In fact, a strengthening economy would tend to drive both the dollar and the market higher, which may be why the two have often risen together over time.
But for companies that sell products abroad, a rising dollar is generally bad news, as it means that every cent made somewhere else is now worth a bit less at home.