Morgan Stanley's latest report anticipates a robust earnings season for the S&P 500, projecting a 4Q EPS increase of 11% y/y on a 3% y/y sales growth. Despite a 9% rise in the U.S. Dollar Index (DXY) from September through year-end, which could introduce currency headwinds, the impact is expected to be more pronounced at the stock level rather than the index level. "Dollar strength should drive elevated dispersion," Morgan Stanley analysts note, suggesting a favorable environment for stock-picking. The report highlights potential upside for companies like Axon, Cloudflare, and Walt Disney, while cautioning on Caterpillar and Fortinet due to anticipated earnings pressures. As the earnings season unfolds, the focus will be on how companies navigate these currency challenges and the broader economic landscape.