WSJ's Take On the Week JPMorgan's David Kelly on Why Investors Should Turn to Global Markets
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Jun 1, 2025 
David Kelly, chief global strategist at J.P. Morgan Asset Management, shares his expert insights on why international markets are currently outpacing the U.S. He discusses the implications of ongoing trade tensions, the weakening U.S. dollar, and the critical need for global diversification in investment strategies. Kelly also emphasizes the importance of recognizing regions that offer better returns and the shifting landscape of American investors as they navigate these economic uncertainties.
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US Stock Valuation Premium
- The U.S. stock market holds a 50% higher price-earnings ratio than international stocks, reflecting overvalued exceptionalism.
- A weakening U.S. dollar this year could enhance international stock returns for U.S. investors.
US Dollar Overvaluation Impact
- The U.S. dollar has dropped 8% this year but remains overvalued, impacting the trade deficit.
- If the dollar weakens further, international stocks and currencies could perform well, reversing years of U.S. exceptionalism.
Tariff Uncertainty Harms US Markets
- Tariffs and tariff uncertainty negatively affect U.S. investment and international markets' outperformance.
- Clearer trade agreements could reduce U.S. concerns and lessen tariffs' negative effects.