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Why One Bank No Longer Favors US Stocks Over European Shares
JPMorgan's "neutralizing" US equities.
I've never seen the action verb form of "neutral" used quite that way in the context of stocks. It conjures an amusing visual: Equities were becoming dangerously unruly and as such, we had no choice but to neutralize them.
In this case, though, "neutralizing" just means the world's most important bank is dropping their preference for US shares over European equities.
The bank's preference for US stocks (versus Europe) dates to May of last year. The decis
So, developed market stocks (and maybe EM) might provide a cushion in a U.S. downturn, but no out performance. I’ll take my chances with U.S. stocks until there is a real reason to change horses. No real reason in the past thirty years (trades excepted).
You might have to question your confidence when it becomes clear that Trump will be returned to office.
(For stocks), it is all about how much the US government spends in excess of taxes collected. Both Biden and Trump will be maximizing that amount.
Long US equities.
A good point. But capital markets generally do not welcome political instability and/or surging inflation. Make that stagflation as import taxes are cranked up and the workforce in agriculture, construction and many service businesses is decimated by mass deportations.
Call me crazy, but I don’t think that, if elected, Trump will be as “draconian” on shutting down immigration and deporting immigrants as he is campaigning on.
I say this based on the fact that 1. One can not trust him
2. He did very little to shut down immigration when he was last the US President and the Republicans controlled Congress.
Trump’s closest advisor, Stephen Miller, has been quite public about the plans they have ready to roll out on day one. Including moves to overwhelm immigration advocates.
Will they allow bounties to be placed on those who turn in immigrants? Before you dismiss the idea, look at Texas: Texas passed SB 8, to allow a private right of action for any citizen to bring a civil claim against anyone who aids or abets in the performance or inducement of an abortion.
It won’t only be Latin Americans – Many Asian immigrants smugly say “it won’t impact us because we came legally. Sorry, MAGA bounty hunters just see “Asian” when they look at you.