Stay informed about free updates
Simply register US stock Myft Digest – delivered directly to your Inbox.
Wall Street's “American uniqueness” trade has been broken in recent weeks because the emergence of Donald Trump's tariffs and uncertainty about economic outlook and geopolitic prompted an unusually prolonged and deep sale in the US dollar and shares.
This year, Greenback lost 4 percent against the baskets of six peers, while the Blue-Chip S&P 500 dropped almost 4 percent.
According to the Goldman Sachs Investment Bank research, such a large and persistent decline in Wall Street shares and currencies are unusual, with these types of episodes over the last 25 years in the last 25 years in the last 25 years. Waste means conversion from recent years when betting that the US economy overcomes peers OUR Financial assets at the expense of other major markets.
“In recent weeks, growing doubts have raised one of the fastest US stock market repairs since the early 1970s,” Goldman Sachs told clients this week and added that “while repairing on the capital market is not so unusual, the same dollar sale is.
Recent outlets for US stocks and dollar come when Trump's growing trade war shaken by global financial markets and raised concerns about the trajectory of the world's largest economy. The federal reserve system on Wednesday reduced its growth forecast and raised its view of inflation and quoted tariffs to a significant part of Downgrade.
Until this year, Wall Street shares dominated on global markets – raised by expectations that the US economy will continue to grow at a faster pace than its opponents. MSCI's US shares index increased by 54 percent from 2023 to 2024, while the Factset meter of the Index provider increased by a global developed market by $ 17 percent.
In the immediate consequence of Trump's election victory in November last November, the shares were even higher, while the dollar jumped to the betting that pro-business policies would increase growth, while tariffs would eventually prove to be more measured than the president threatened.
However, these bets disintegrated rapidly from the inauguration of Trump in January, while the president launched steep tariffs for imports from large business partners, including Mexico, Canada and China, and threatened to come – to drive Wall Street banks to question how long the US assets can overcome.
“American exceptionality – defining the topic of macro shop of this cycle – disappeared for a year and pulls [dollar] lower, ”said monetary strategists in JPMorgan this week and added that“ we turned directly to Bearish [on the dollar] for the first time in four years ”.
JPMORGANA strategists emphasized “uncertain tariff delivery” and “softening US activity, which is more acute and pre-expected than expected” among the reasons for their pessimism regarding the dollar, while pointing to a “fraudulent moment in German-European fiscal and geopolitics”-which indicate to the recent proposal of the German government and shaking.
So far, this year the World World Index, with the exception of the US, has grown by almost 9 percent, while the US Index Provider's breakup dropped almost 4 %.
Global asset managers have also become more negative this year, which has intensified the debate on the future of American uniqueness.
Scott Chan, the main investment director of $ 353 billion in the California State Pension System of State Teachers, said at the recent meeting of the Investment Committee that the “stunning amount of executive orders” from Trump caused “great uncertainty on the market”. He added: “The potential risks here are unprecedented. The world is changing.”
Other strategists pointed out the flows to international shares because evidence that investors actively change their portfolios behind the American coast.
“It seems that market participants are starting to look elsewhere outside the dollar or are beginning to diversify their possession of the dollar to other markets and currencies,” said Bob Michele, head of global fixed income in JPMORGAN Asset Management. “Wider markets tell us that it seems that the uniqueness of the dollar has reached its peak.”
However, economists and analysts stressed that the US economic future remained uncertain and that the dead were not determined with the probability of lengthy slowing.
This year, cash flooded on the market for the Ministry of Finance, in the new Haven status signal, which was still attributed to the assets of the dollar. But most of these tides have poured into short -term government bonds Rather than the longer cash registers-the analysts said, it emphasizes the lack of belief in the direction of the US growth.
Eric Winograd, the chief economist of Alliancebernstein, said that “markets absolutely question” the viability of American uniqueness, but that it was “premature to conclude” that this significant reputation was “above”.
“I still think that business policy is pushing for America to be injured relatively less than other countries,” he added, noting that concerns about growth have so far been supported by sentiment surveys more than hard data. “Now we have to see the facts – we must see the evidence, and it will take time,” he said.
Yet Winograd added: “The size of the exceptionality you could expect probably a little refused”.
Visualization of data using EVA Xiao. More Sun Yu Reports
