Selling America is a ‘dangerous bet,’ UBS CEO warns as markets panic

Core Viewpoint - Investors are increasingly moving away from U.S. assets, leading to a rise in gold and silver prices, while the 10-year Treasury yield reaches its highest since August, indicating a significant market shift [1][2]. Group 1: Market Reactions - The U.S. dollar has declined, and traditional safe-haven investments like gold and silver have surged to record highs amid market volatility [1]. - The Nasdaq and S&P 500 indices fell by 2% on the same day, reflecting investor unease over tariff threats from President Trump [7]. Group 2: Economic Insights - UBS Group CEO Sergio Ermotti emphasized that diversifying away from the U.S. is a "dangerous bet," highlighting the U.S. as the strongest economy with the highest level of innovation [1]. - In the previous year, the U.S. created 25 million new millionaires, averaging 1,000 new millionaires per day, showcasing significant wealth creation and innovation in the U.S. economy [3]. Group 3: Potential Risks - There is a risk of further de-dollarization if European countries begin selling U.S. bonds, with Denmark already selling $100 million in U.S. Treasuries due to concerns over U.S. finances [5]. - If Europe follows Denmark's lead, it could put an $8 trillion market at risk, as Europe holds twice as many U.S. bonds and equities as the rest of the world combined [5]. Group 4: Strategic Perspectives - Ermotti pointed out that UBS sees potential for increased market share and presence, driven by wealth creation, GDP growth, and innovation [4]. - Analysts warn against overreacting to tariff threats, suggesting that such reactions could lead to missing out on the long-term innovation that has driven stock market growth [7].