Coke - Final Thoughts

Ticker Symbol: COKE

Final Thoughts

The key to Coca-Cola's earnings near-term remains the dollar. Coke's growing overseas reach (As evidenced by their attempted China Huiyuan Juice Group Ltd purchase) translates into increased exposure to currency fluctuations.

After hitting all-time record lows in 2008 in the wake of the Fed's dramatic expansionary monetary policy, the dollar has since staged a furious rally. Risk aversion has served to support the dollar of late. A stronger dollar bites into U.S. exports by making them more expensive overseas.

While consumer demand continues to slow in the U.S., Coca-Cola is increasingly relying on foreign markets for its growth drivers. Whereas beverage makers were seen as relatively resistant to market drag as the S&P retraced towards 800, Wall Street has become indifferent to soft drink makers in the wake of March's bank-led rally. If the broad-market rallies, better trades can be found elsewhere. Yet Coke is an attractive option for dollar bears.

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