GlobalData TS Lombard: Perkins Vs Beamish Is America Great Again?
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Jul 4, 2025 Delve into the contrasting dynamics of the U.S. dollar versus the S&P 500, where domestic optimism clashes with global investor skepticism. Explore the impact of artificial intelligence on equity markets, questioning the potential for an investment bubble. Discuss the strong labor market's influence on Federal Reserve decisions, alongside a light-hearted take on fiscal policies. Finally, uncover the intricate relationship between bond yields and government debt, and celebrate a 10% gain in macro strategy performance.
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Dollar Struggles Amid Investor Skepticism
- The dollar struggles because global investors distrust US policies and Trump's unpredictable moves.
- US equities rise mainly due to domestic retail investors popping a narrow tech bubble.
US Exceptionalism Narrative Overstated
- US investors remain heavily invested in domestic equities, unlike global investors reallocating funds abroad.
- The "US exceptionalism" narrative seems overstated given underlying tariff and profit pressures.
Tariff Uncertainty Increases Risk Premium
- Tariff revenues are politically critical to squaring Republican fiscal budgets, so zero tariffs unlikely.
- Uncertainty about tariffs prompts investors to demand higher compensation and adds volatility risk to US assets.