Donald Trump's tariffs are providing serious growth for international stocks while simultaneously ending the dominance of the S&P 500 index — at least for now, writes Bloomberg.
International stock markets are outperforming the main U.S. stock index this year for the first time since 2022 and for the first time amid a market upturn since 2009. The main reason is concerns that tariffs and trade uncertainty will have an excessive impact on the growth of U.S. corporate earnings.
The MSCI World Index excluding the U.S. is expected to outperform the S&P 500 in 2025, adding 18% compared to a more modest growth of 7.8% for the S&P 500. This is also reflected in individual performances: the key stock market index of Mexico increased by 18%, Canada by 12%, Germany by 21%, Spain by 26%, Brazil by 14%, and the UK by 11%.
This is a sharp turnaround after years of booming U.S. stock growth, driven by the largest tech companies and promises in artificial intelligence, while their global counterparts showed relatively lackluster performance. This has made stocks in markets outside the U.S. relatively cheap.
"The pace of change matters in the markets, and it seems that international markets, in general, are becoming more favorable for investors," said Craig Basinger, chief strategist at Purpose Investments Inc, in an interview. "America still remains the gold standard, but if the gap narrows, then the valuation gap may also decrease."
In a June survey by BofA Securities, 54% of fund managers surveyed consider international stocks to be the most promising asset over the next five years. Only 23% hold the same view regarding U.S. stocks.#TRUMP #whitehouse #NewsAboutCrypto #BinanceSquare
