The world is changing, the US market is not so

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The writer is the head of Rockefeller International. His last book is “What happened in capitalism”

It is suddenly fashionable to talk about how the “American exceptional” era ends, given Trump’s policies, the decline in the dollar, and the fact that the securities market in the United States until this year weakens its international competitors with the widest margin since 1987.

But the surprise is that despite the shocks emitted by Washington and the Middle East, American stocks are still rising. It is also the prices of American bonds, despite the explosion of the American deficit. The performance of the American market is less exceptional because the rest of the world rises, not because the United States is decreasing.

Many reject this flexibility as reckless optimism and argue that American stocks will soon surrender to the “depression” for 2025. But in my experience, when the separation between commentators and markets is widely, the message from the market is usually healthier. Therefore, it is worth trying to know what the markets might feel.

American stocks It appears to be extinguished in the historically high assessments on the data that continues to show that Trump’s policies have not yet affected inflation or growth in any meaningful way. The great fear was that its advanced definitions will constantly make inflation and slow growth. Instead, inflation remained lower and growth higher than consensus expectations. Customs tariff revenues began to appear in the cabinet cabinets, but not much in consumer prices, for somewhat mysterious reasons; Do foreign suppliers absorb the costs, or may the American companies decrease the current inventory?

In one way or another, American companies did not suffer from great success. Most of the predictors are still demanding the growth of profits to slow down (to less than 8 percent), height inflation (to about 3 percent) and GDP growth to a decrease (to about 1.5 percent) by the second half of this year. but market It is brushing these expectations, too.

American companies resurrect their shares at a pace close to $ 4 billion a day. All American retailers, they buy an unusually aggressive pace this year. Nearly half of the American family’s wealth is now invested in stocks – breaking the record during the Dotcom 2000 bubble. Although young investors are often said they represent “stupid money”, their faith is fruitful so far. To the old line – you never bet against the American consumer – a new development may be added. You never bet against the retail investor in the United States.

Meanwhile, foreigners do not install a significant retreat from American stocks or bonds despite their threat of new taxes on transfers, foreign investment, deportation and more. This seemed to seem like a marriage that remains stagnant and fearful of what may come with change.

As in the previous bear markets, including markets in the first decade of the twentieth century, the dollar decline in recent months has been considered an organized amendment after a long period of evaluation – and not as evidence that America is facing a problem in financing its great deficit.

If it was clear last year that instead of falling as expected, the deficit in the United States would continue towards a new peak – perhaps approximately 7 percent of GDP – most analysts had predicted riots in the bond market. Instead, the response was concealed, with bond returns decreased marginal this year.

For most observers, Trump’s presidency brought unprecedented turmoil, even threatening to change the basic idea of ​​America and its place in the world. But the stock market behaves as if nothing has changed. The same internal trends that dominated last year to play.

Mania from artificial intelligence has reached new horizons with a US -led basket of artificial intelligence stocks to the highest levels ever. The emerging narration at the beginning of the year, that the United States was losing its progress to its Chinese competitors such as Debsik, faded and analysts talking again about America’s advantages. Americans seem to adopt Amnesty International faster than they have adopted digital technologies in the past, including the Internet itself. American companies publish them faster than their foreign counterparts, including even those in China. Among the top 10 Amnesty International platforms in the world by a number of users, eight American, led by ChatGPT.

The five largest technical companies in the United States continue to control and still represent approximately 30 percent of the American stock market value. Meanwhile, small and medium -sized American stocks in the United States are still leaving the knees as they were for years, now now under the leadership and promised to help those companies.

For optimists in the market, artificial intelligence is considered a miracle of productivity that can enhance American economic growth and save it from its increasing deficit and debts. They are looking for this pink future, and not to talk about economic troubles later this year.

However, there are three ways that may be broken: the transformations of the list of artificial intelligence again, given that companies are investing hundreds of billions of dollars in the infrastructure of Amnesty International, Without knowing completely who will benefit, or when. Economists prove unusually more right than the market about the threat of low growth and high inflation than definitions. Or investors realize that the clear power of consumers and American companies is a mirage – the other side of the United States’ huge and high deficit.

In order for one of these scenarios to run, the American markets may continue to ignore the depression – and encourage Trump to believe that he wins.