Pietari Laurila
United Arab Emirates
2m
ᴡᴇᴇᴋʟʏ ᴜᴘᴅᴀᴛᴇ 29 ꜱᴇᴘᴛᴇᴍʙᴇʀ 2025 For much of the past two decades, U.S. markets have stood apart—delivering stronger growth, higher profits and premium valuations compared with peers. This “exceptionalism” has been underpinned by deep capital markets, reserve currency status, abundant energy, a flexible labour force and world-leading companies, particularly in technology. Foreign inflows have reinforced a virtuous cycle, allowing the U.S. to finance deficits cheaply while strengthening its market dominance. But a recent report by JPMorgan argues that some of these supports may now be approaching their limits. Valuations are stretched, fiscal policy more unstable, and tariff shifts risk weakening demand for U.S. assets. Even without an outright end to American dominance, the degree of separation from the rest of the developed world may narrow. am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/portfolio-insights/siag-narrowing-the-gap-us-exceptionalism-and-developed-markets.pdf Europe is emerging as the most likely beneficiary of any rebalancing. After years of austerity and banking fragility, the region is now deploying fiscal stimulus on a scale not seen for decades, from Germany’s defence spending to EU-wide investment funds. Energy diversification has reduced vulnerabilities exposed by Russia’s war in Ukraine, while banks are recapitalised and delivering strong returns. Capital markets and regulatory reforms are making Europe a more credible competitor for global capital, though demographic headwinds and lagging innovation remain constraints. Japan too is showing signs of revival after decades of stagnation. Corporate governance reforms, more shareholder-friendly policies, stable inflation and a stronger yen are drawing fresh inflows. Despite an aging population, Japanese companies have delivered resilient earnings, supported by overseas investments and renewed domestic demand. A shift in household savings toward equities, encouraged by government reforms, could amplify this trend. The JPMorgan report’s conclusion is not that U.S. exceptionalism is ending, but that the gap to other geographies is likely to narrow. For investors, this suggests that an overweight U.S. bias—particularly in passive portfolios—carries increasing risks. A more balanced, active approach to global allocation may be essential in the decade ahead. 𝟮𝟬𝟮𝟱 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 YTD +31.1% 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗰𝗵𝗮𝗻𝗴𝗲𝘀 None 𝗖𝗼𝗻𝘁𝗮𝗰𝘁 www.triangulacapital.com 𝘛𝘩𝘪𝘴 𝘤𝘰𝘯𝘵𝘦𝘯𝘵 𝘪𝘴 𝘧𝘰𝘳 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯 𝘰𝘯𝘭𝘺. 𝘐𝘵 𝘪𝘴 𝘯𝘰𝘵 𝘢𝘯 𝘰𝘧𝘧𝘦𝘳 𝘰𝘳 𝘳𝘦𝘤𝘰𝘮𝘮𝘦𝘯𝘥𝘢𝘵𝘪𝘰𝘯 𝘵𝘰 𝘣𝘶𝘺, 𝘩𝘰𝘭𝘥 𝘰𝘳 𝘴𝘦𝘭𝘭 𝘢𝘯𝘺 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵, 𝘯𝘰𝘳 𝘭𝘦𝘨𝘢𝘭, 𝘵𝘢𝘹, 𝘰𝘳 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘢𝘥𝘷𝘪𝘤𝘦. 𝘗𝘢𝘴𝘵 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦 𝘪𝘴 𝘯𝘰𝘵 𝘪𝘯𝘥𝘪𝘤𝘢𝘵𝘪𝘷𝘦 𝘰𝘧 𝘧𝘶𝘵𝘶𝘳𝘦 𝘳𝘦𝘴𝘶𝘭𝘵𝘴.
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