We have explained this in a lengthy article some weeks ago, and why we believe that US equities will outperform the rest of the world in the near to medium term (scan the QR code to read the article “Innovation, earnings growth and ruthless capitalism will continue to drive US equities’ relative out performance”, The Edge, Jan 27, 2025). We foresee continued strong global capital inflows in the form of both foreign direct investments (FDIs) and portfolio monies, which will at least underpin sustained strength in the US dollar, if not lift it higher. This would, in turn, enhance investment returns and attractiveness for US dollar-denominated assets, including stocks and bonds.
In a nutshell, we see President Donald Trump’s America First policies — including universal baseline tariffs on all imports, individual and corporate tax cuts, deregulation and measures to boost US oil and gas production — to be net inflationary but positive for the US economy and corporate profit growth.
