Stocks: ‘Dedollarization’ is dead—investors discount Trump's drama as they pile into U.S. assets

Group 1: Market Sentiment and Trends - There is a conflict among analysts regarding strategies for U.S. dollar-denominated assets, with some recommending diversification away from U.S. equities due to unpredictability in the Trump administration [1] - Recent data indicates a potential shift in sentiment, as the S&P 500 increased by 0.26% and is up 1.45% year-to-date, suggesting positive growth [2] - The U.S. Treasury International Capital Data revealed net foreign inflows into U.S. assets of $212 billion, indicating strong foreign investment [3][4] Group 2: Sector Performance and Predictions - Cathie Wood of Ark Invest suggests that her "rolling recession" theory may be ending, predicting a strong economic rebound in the coming years [5] - Tech stocks are expected to perform well in Q4, with analysts projecting strong earnings driven by demand for AI technologies from major companies like Microsoft, Alphabet, and Amazon [9] - The price of copper has risen by 33% over the last 12 months, indicating robust activity in tech sectors that require significant copper for AI data centers [9] Group 3: Political and Economic Context - Investors are becoming desensitized to political drama surrounding Trump, recognizing that many threats may not materialize into significant actions [12] - ING's analysis suggests that while there is a long-term trend towards de-dollarization, the U.S. dollar remains strong, having gained nearly a full percentage point on the DXY index since the start of the year [13] - Recent U.S. economic data, including retail sales and jobless claims, has shown positive trends, contributing to a stable outlook for the dollar [14]