Gamco's CEO says economy can weather strong dollar, oil rout
WASHIGNTON: Mario Gabelli, chief executive officer of Gamco Investors Inc., said a strong dollar probably won't hurt U.S. economic growth, even as the greenback's rally drags earnings lower at companies that sell their products overseas.
Speaking on the television program "Wall Street Week," Gabelli, 73, said there are a number of positive factors, including rising wages, growth in jobs and an improvement in state and local government spending, to counter any negative effects of a strong currency and the rout in energy prices.
"You have the impact of the currency on reported results and the impact on exports, and that is hurting some of the reported numbers," Gabelli said. "But I'm not in the camp that will argue that you'll have an economic slowdown in the next six months. I just don't see it." On Aug. 18, Wal-Mart Stores Inc., the world's biggest retailer, reduced its annual earnings forecast for the year, partly because the strong dollar is cutting into overseas revenues. Currency fluctuations lowered earnings per share by 4 cents in the fiscal second quarter. The greenback has climbed 17 percent in the past 12 months against a basket of 10 currencies. Gamco, based in Rye, New York, oversees $45.4 billion. "Wall Street Week" is produced by SkyBridge Media, an affiliate of SkyBridge Capital, the fund-of-funds business founded by Anthony Scaramucci.