The U.S. economy was growing at an annualized rate of 4.4% last year (the most recent period for which we have a GDP number), and inflation is in decline. The stock market is up nearly 12% over the last 12 months. On paper, that would suggest investors ought to have strong confidence in the U.S. dollar. Yet the opposite is true. The U.S. dollar remains in decline. It’s down 9.4% over the last 12 months and was down nearly 10% for 2025, as measured against a standard basket of foreign currencies. There are ...

Core Viewpoint - Investors are planning to reduce their exposure to U.S. hedge funds for the first time since 2023, influenced by discussions surrounding the "Sell America" trade [1] Group 1 - The trend of decreasing investment in U.S. hedge funds marks a significant shift in investor sentiment [1] - The discussions about the "Sell America" trade have gained traction, indicating a potential change in market dynamics [1] - This shift could reflect broader economic concerns and changing investment strategies among institutional investors [1]

Core Viewpoint - The U.S. dollar is experiencing significant volatility due to unpredictable government policies and concerns over Federal Reserve independence, leading to potential capital flight and a reassessment of U.S. assets by global investors [1]. Group 1: Dollar Volatility and Market Impact - The dollar has seen a decline of almost 2% in one week in January, reaching four-year lows, before rebounding sharply, which has caused turmoil in the metals market [1]. - Gold prices fell by 5% following the dollar's rebound, marking its largest daily drop since the early 1980s, while silver and copper also experienced significant declines from recent peaks [1]. - The global currency market, valued at nearly $10 trillion a day, has become more volatile, with the euro/dollar exchange rate volatility reaching its highest level since July [1]. Group 2: Investor Sentiment and Asset Management - Foreign investors hold approximately $70 trillion in U.S. assets, having more than doubled their holdings over the past decade, but are now reassessing their exposure due to the dollar's instability [1]. - A disorderly decline of the dollar, defined as a 5% monthly loss, could lead to a drastic sell-off of long-dated Treasuries and tighten U.S. financial conditions significantly [1]. - Investment managers are shifting towards a neutral stance, reducing exposure to stocks and gold, and employing options strategies to hedge against uncertainty in Treasury yields [1].

Market Overview - Australian shares are expected to advance at open, continuing the Week 5 rally, driven by the S&P 500 setting records and anticipation for upcoming inflation data [1][2] - Analysts describe the upcoming quarterly inflation report as "make or break," with expectations set at a threshold of 0.8% for potential RBA rate hikes [2][3] Company News - BHP has reclaimed its position as Australia's most valuable listed company, surpassing Commonwealth Bank, with a year-over-year increase of +26%, while CBA has seen a decline of over -20% since mid-CY25 [5] - DroneShield has experienced a -12% drop this week due to a reported shrinkage in its sales pipeline, although it remains up +35.7% year-to-date [5] - Humm Group's investor Akat Investments has requested an investigation by the Takeovers Panel regarding Credit Corp's offer from the previous year, focusing on the takeover's timeline [5] Commodities and Forex - The Australian dollar is trading at 70 cents to the U.S. dollar, a level anticipated for CY26, reached sooner than expected [7] - In commodities, Iron Ore is down -0.1% at $103.55 per tonne, Brent Crude is up +2.9% at $67.44 per barrel, Gold is priced at $5,166 per ounce, and US natural gas futures have retreated -4% to $6.49 per gigajoule [7]

Market Performance - Gold and silver were among the best-performing investments in 2025, with gold increasing by 73% and silver by 194% since the beginning of the year [5][10] - Retail investors poured a net average of $15 million into gold and $7 million into silver investments daily throughout the year [5] Investor Sentiment - Many investors expressed concerns about volatility in US markets, leading to increased interest in precious metals as a hedge against inflation and economic uncertainty [2][10] - The "Sell America" narrative contributed to a fear of missing out (FOMO) among investors, driving them towards gold and silver [15][16] Online Activity - Gold and silver saw significant online discussions, with the SPDR Gold Shares ETF being the third most talked-about investment on r/WallStreetBets [6] Retail Demand - Bullion Exchanges reported a doubling of clientele in 2025, with many first-time buyers lining up to purchase metals [11] - The CEO of Bullion Exchanges noted that the firm could have seen a 200% growth if not for limited capacity and metal shortages [12] Market Dynamics - The rally in gold and silver prices was influenced by both traditional investors and newer entrants driven by FOMO [15][16] - Concerns about a potential market correction are present, with estimates suggesting gold could drop by 9% and silver by 31% if the hype subsides [17]

One of the biggest public investors in the world has trimmed its exposure to U.S. assets in yet another indication that the "sell America†trade is taking root in global capital markets. In this article NVDA MP 5401 President Donald Trump, shown following his speech at the World Economic Forum in Davos, Switzerland, on Wednesday. (Fabrice Coffrini / AFP / Getty Images) ...

Core Viewpoint - The article discusses the implications of recent U.S. actions and rhetoric under President Trump, particularly regarding Europe, and emphasizes the need for Europe to strengthen its financial independence and investment at home in response to U.S. pressures [1][2][9]. Economic Context - Europe is urged to invest more of its vast savings domestically, as reliance on the U.S. economy and its capital markets poses risks, especially given the current political climate [2][11]. - The U.S. is identified as the world's largest debtor nation, relying on foreign capital, including significant European investments, to fund its deficits [6][9]. Investment Strategies - Joint borrowing within the eurozone is proposed as a means to create a safe asset that could rival U.S. Treasuries, thereby enhancing Europe's financial strength [5][12]. - The article highlights the need for Europe to better integrate its capital markets and develop a larger pool of safe assets to compete with U.S. financial instruments [12][15]. Market Reactions - The article notes that Trump's tariff threats led to market volatility, but his quick reversal indicates a vulnerability in U.S. policy and a potential leverage point for Europe [7][8]. - European investors have historically benefited from capital exports to the U.S., but the current political climate may necessitate a reevaluation of this strategy [10][15]. Future Outlook - The article suggests that ongoing tensions and unpredictability in U.S. policies could drive European investors to diversify away from U.S. assets, although this process may take time [11][15]. - The need for Europe to bolster its military and infrastructure spending is highlighted as a way to increase the supply of European bonds, which could help stem capital outflows [12][15].

Core Viewpoint - The U.S. dollar is weakening against major global currencies, losing 11% against the euro and 9% against the British pound over the past year, attributed to the "sell America" trade by global investors [1][2]. Group 1: "Sell America" Trade - The "sell America" trade indicates a shift where global investors are moving money out of U.S. assets due to a less attractive investment environment, influenced by changes in trade policy, rising national debt, and potential threats to Federal Reserve independence [2]. - This trend could lead to increased gold prices, higher yields on U.S. bonds, and further depreciation of the dollar [2]. Group 2: Performance of International Stocks - International stocks are currently outperforming U.S. stocks, with the Vanguard Total International Stock Index Fund ETF gaining 32% in the past year compared to 15% for the S&P 500 and 19% for the Nasdaq-100 [3]. - The Vanguard Total International Stock ETF is highlighted as a smart investment choice for exposure to global markets [4]. Group 3: Hedging Against Dollar Weakness - Investing in international stocks and ETFs like the Vanguard Total International Stock ETF can serve as a hedge against a declining dollar, as the dollar value of international stocks tends to increase when the dollar weakens [5]. - A hypothetical example illustrates that a 10% depreciation of the dollar can increase the value of a European stock purchased at $100 to $110 due to exchange rate changes [6]. Group 4: Potential for Higher Returns - American investors can achieve higher returns by investing in international stocks if the U.S. dollar continues to decline, with the Vanguard Total International Stock ETF providing access to thousands of global stocks [7].

Core Viewpoint - The article discusses the current trends and factors influencing the gold market, highlighting the impact of economic indicators and geopolitical events on gold prices [4]. Group 1: Market Trends - Gold prices are experiencing fluctuations due to varying economic data, including inflation rates and interest rate decisions by central banks [4]. - Recent geopolitical tensions have led to increased demand for gold as a safe-haven asset, contributing to price volatility [4]. Group 2: Economic Indicators - The article notes that inflation remains a critical factor, with recent reports indicating a rise in consumer prices, which typically boosts gold's appeal [4]. - Interest rate changes by central banks are closely monitored, as higher rates generally lead to lower gold prices due to increased opportunity costs [4]. Group 3: Investment Sentiment - Investor sentiment towards gold is shifting, with many viewing it as a hedge against economic uncertainty and currency devaluation [4]. - The demand for gold in investment portfolios is expected to rise as market conditions remain unpredictable [4].

Market Reaction - US stocks rebounded after President Trump's comments at the World Economic Forum, easing geopolitical concerns related to Greenland [1][3] - The Dow Jones Industrial Average rose by 141 points, or 0.3%, while the S&P 500 gained 0.4% and the Nasdaq Composite advanced 0.3% [1][2] Geopolitical Context - Trump's remarks included a clear statement that he would not use military force to acquire Greenland, which helped to reverse market sell-offs [4][5] - The comments were made during a speech addressing various global issues, including NATO and US trade policy [3] Financial Market Dynamics - US Treasury prices rose and yields fell, with the 10-year Treasury yield easing after briefly topping 4.3% [6] - The US dollar index stabilized, indicating a pause in the diversification away from dollar-based assets that had occurred previously [6] Previous Market Volatility - Stocks experienced significant losses prior to Trump's comments, with all major benchmarks logging their worst daily performances since October 10 [7] - The sell-off was accompanied by rising Treasury yields and a sharp decline in the dollar as investors reduced exposure to US assets [7] Emerging Trends - Analysts noted a re-emerging "sell America" narrative, with concerns about diversification away from dollar assets, particularly among government entities [9][10] - Treasury Secretary Scott Bessent attempted to downplay market concerns, stating the administration was not worried about the previous day's turmoil [10] Ongoing Trade Tensions - Despite Trump's reassurances, uncertainty remains high as he continues to seek negotiations regarding Greenland's acquisition [11] - European leaders have responded strongly to US tariff proposals, with potential repercussions for US businesses in the European market [12][13]