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With the Dollar in a Lurch, Here's How to Stay on Top

Author

Noah Zelvis
November 09, 2025

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Services snapped back in October with economic expansion setting in and new orders at their strongest since last fall, even as hiring stays soft.

With a go-slow Fed and slightly warmer prices, the dollar has a tailwind, and a December cut isn’t a sure thing.

Here’s how to lean into what’s working.

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October’s ISM Services jumped back into expansion, with new orders the strongest in a year and activity solid. Employment’s still iffy, but not falling off a cliff. The prices-paid gauge was sticky enough to keep the Fed cautious on the pace of cuts. Markets heard “growth okay, inflation not done,” and the U.S. dollar firmed as rate-cut odds for December got trimmed a touch.

That matters because a stronger greenback is a tax on reported profits for multinational-heavy portfolios (foreign sales translate into fewer dollars), and it often nudges investors toward domestic earners with pricing power. 

It also tightens financial conditions abroad, weighs on commodities, and can cool inbound tourism. In other words, fine for select U.S. services names, trickier for exporters and FX-heavy franchises until the dollar relaxes.

How to read the setup:

  • Growth: Good enough, led by services demand.

  • Inflation: Still bothersome in services, so the Fed will flirt with cuts, not sprint.

  • FX: USD strength is the default while U.S. data looks sturdier than peers, so expect translation headwinds for global giants.

You don’t need to predict the next press conference. You just need exposure that earns in dollars, passes through costs, and doesn’t hinge on a weaker USD to work.

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Actionable Plays

  • Tilt domestic: Favor U.S.-centric services with contractual pass-throughs or clear pricing power.

  • Be picky with multinationals: If you want them, stage entries and consider a currency-hedged sleeve for international exposure.

  • Own volatility toll booths: Exchanges/clearinghouses monetize every re-pricing in rates and FX while the cut path stays maybe.

  • Barbell the core: Quality cash-flow compounders in the middle, plus a small sleeve of cyclical services that benefit if rates drift down without reigniting inflation.

  • Keep some dry powder: T-bills/HYSA for opportunistic adds on any no-cut wobble days.

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Top Picks

O’Reilly Automotive (ORLY)

If services are steady and the labor market is cooling, not collapsing, car owners keep fixing what they have.

That’s ORLY’s sweet spot: a domestic, high-ROIC parts retailer that wins on availability, speed, and expertise. Minimal FX, dependable gross margins, and a long runway from an aging fleet and “repair, don’t replace” behavior.

It’s a good play now because a firmer USD and uneven hiring don’t derail DIY/Do-It-For-Me demand. If anything, constrained new-vehicle affordability extends the maintenance cycle.

ORLY’s distribution moat (hub stores, rapid replenishment, deep SKU breadth) and professional customer mix drive resilience, while disciplined buybacks quietly compound EPS.

Watch out for weather and gas-price noise tweak quarterly cadence, but the multi-year arc of more miles, older cars, and tighter budgets still do the heavy lifting.

Waste Management (WM)

Boring in the best way. WM’s a domestic, essential service with CPI-linked contracts and proven cost pass-through.

As services activity and small-business openings improve, commercial volumes and roll-offs typically follow, and the company’s recycling/renewables initiatives add an extra earnings lever.

This is a good play because a stronger USD is largely irrelevant. This is dollar-in, dollar-out revenue tied to local activity, not exports. Plus, WM’s pricing discipline and route density protect margins even if inflation in services stays sticky.

There are a few risks still. Commodity swings in recycled materials can jiggle results, but the core franchise of collection and disposal with high barriers to entry smooths the bumps.

Intercontinental Exchange (ICE)

When the market argues about pace-of-cuts and the dollar flexes, volatility is a product. ICE’s futures, options, and clearing platforms capture that churn across rates, FX, energy, and equities.

You’re not betting on the direction of the next move—you’re monetizing the need to hedge, roll, and reposition as data and Fed rhetoric shuffle the deck.

There’s a good play here. Services upside + sticky prices = ongoing repricing of the rate path and the USD, which tends to lift volumes and open interest.

The model is capital-light with powerful operating leverage, and index/NYSE listings and mortgage-tech add diversified fee streams.

Of course, there’s a chance that everything goes eerily quiet and volumes normalize. But policy uncertainty rarely stays quiet for long.

Costco (COST)

Membership model, private label muscle, and world-class merchandising. COST is a domestic heavyweight that benefits on the margin from a firm USD via import costs, while sticky traffic and renewals keep the engine humming.

It’s a clean way to participate in resilient services/consumer spend without sweating translation.

If inflation in services remains a thing, consumers lean harder into value-per-unit. Costco’s ability to negotiate, hold prices sharp, and share scale economics with members protects share and trust. Any glide lower in rates only helps big-ticket mix at the edges.

There are some things to note with this company, though. Valuation rarely looks cheap, but the membership annuity, steady share gains, and occasional special dividends are why people hold it through cycles.

Bottom Line

Services said we’re open, prices said easy there, and the dollar said I’ll take it from here.

While that mix lasts, keep your core in high-quality, U.S.-centric services and own a volatility toll booth.

Be selective with global earners until FX momentum cools, and stage buys around data-induced mood swings.

You don’t have to outguess the next rate cut, you just have to own businesses that earn whether the Fed winks or waits.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes