Hottest American stocks in 2017 get the bulk of sales from outside the U.S.

The setting for the story about the USA's most successful stocks this year is not in America, but overseas.

As President Trump drives home his "America First" message, U.S. stocks that get 50% or more of their sales revenue outside the country are delivering far bigger returns than American companies that ring up 90 cents out of every dollar in sales domestically.

Companies with a big overseas presence are up more than 19% this year, according to Bespoke Investment Group, citing data through Sept. 25. That's far ahead of the 4.5% return of stocks of companies that get 90% of their revenue within U.S. borders.

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What's causing U.S.-centric companies to perform so poorly? The same forces, it turns out, that have catapulted large multinational American companies to the top of the performance charts, Wall Street pros say.

Here's the rap sheet on U.S.-focused stocks:

1. Blame the greenback. The dollar has been in freefall this year. It is down more than 9% against a basket of foreign currencies, including the Japanese yen and euro, the common currency of the 19-nation Eurozone. 

And what's bad for the U.S. currency is very good for companies that sell stuff abroad. 

The reason? A weak dollar lowers the cost of U.S.-made gadgets, computer chips, hamburgers, cosmetics and earth-moving machines purchased abroad by foreigners. And the more affordable products made by Apple, Nvidia, McDonald's, Estée Lauder and Caterpillar are, the more consumers and businesses based abroad can buy. And that helps their stock prices, which are all up more than 28% this year, with Nvidia leading the charge with a 60% gain.

"It's 100% related to the dollar," says Paul Hickey, co-founder of Bespoke Investment Group, a New York-based research firm.

A weak dollar provides a tailwind for international profits. That same benefit, however, is not available to U.S. companies that get most of their sales at home, such as auto parts retailers such as  Advance Auto Parts, down 42% in 2017 through Sept. 25, or department stores such as Macy's, down 39%, or real estate-focused companies such as Macerich, which runs shopping centers, down 24% this year. 

Another positive for companies selling a lot of stuff in places such as Europe, China and Japan — but which does not boost U.S.-centric businesses — has been the "strengthening economies abroad," which showed up in their earnings results in the second quarter, adds Lindsey Bell, investment strategist at CFRA Research, a New York-based Wall Street firm.

2. Blame Amazon. A list of the domestic stocks that have suffered year-to-date declines of more than 10% and as much as 45% include a who's-who list of retailers such as Macy's, Target and AutoZone and grocery stores such as Kroger that have been hurt by the rapid shift to online shopping and the domination of Amazon in digital retailing.

"Amazon is taking out large segments of our traditional economy," says Alan Skrainka, chief investment officer at Cornerstone Wealth Management in Des Peres, Mo.

3. Blame Trump. The Republican-controlled Congress was supposed to pass Trump's America First agenda, which included plans to invest big in infrastructure projects and lower corporate taxes. But those policies, which were seen helping U.S. businesses most, haven't been passed yet by Congress.

"The lack of domestic stimulus via infrastructure spending and tax cuts have hurt stocks more heavily focused on the domestic economy," Bell says.

The absence of Trump's pro-growth policies has also been a reason why the dollar has lost ground vs. currencies such as the euro and Japanese yen, Hickey adds.  A lot of foreign cash that poured into the U.S. after the November presidential election has since flowed out and been invested in international economies that have "picked up steam," Hickey says.

Another stumbling block for domestic companies has been the continued weakness of the oil market, which is still suffering from oversupply, adds Howard Silverblatt, senior index analyst at S&P Dow Jones Indexes.

A barrel of U.S. produced crude is now trading around $52 per barrel, which is nearly 9% lower than at the end of 2016. As a result, the energy sector — which includes many domestic-focused companies, such as natural gas producer Range Resources and oil exploration and production company Chesapeake Energy — is currently the worst-performing sector in the Standard & Poor's 500 stock index. It is down 9% this year.