American Exceptionalism vs. European Challenges

The contrast between the economic performance of the U.S. and Europe is highlighted by differing PMI figures. In the U.S., service sector activity showed an increase, while major European economies like France and Germany are experiencing contractions, with Germany's services reading falling below the critical threshold of 50. This divergence affects market sentiment and expectations for central bank actions, with U.S. markets pricing in a stable outlook while European markets begin to weight the potential for interest rate cuts by the ECB. As tariffs grow in prominence, American businesses express optimism, while their European counterparts fear the negative effects on their economy.