The author of this economic and market column would be very tempted to speak of politics and geopolitics in this first article of the month of March, given the criticality of the current moment, which has no precedents from the end of the Second World War forward, as regards the relationships between developed countries, daily placed under stress by the president of a nation whose flag contains 50 stars, at least for now …
But, faithful to the title of the column, it will not do so, seeing you instead of how on the markets they are changing some important trends who had accompanied us for long years and on the current rotations.
Understanding when long -term trend weaken and then disappear or invert are always very complicated; Taking what are actually just temporary breaks in a trend is the most typical error.
We think that today there are four important signs to highlight; important because of a magnitude that makes them very significant.
- The pinnacle of American exceptionalism on the side side was reached between the end of last year and the beginning of 2025 with peaks ever seen in the past: the American equity has experienced the best 15 years of its history (12% of average annual performance, seeing Bridgewater graphic designer), greatly overlapping the rest of the world (Europe, to give an example, exceeded in 13 of the 15 years) and reaching the highest weight in the MSCI index. World (an amazing 74%, almost twice the weight of 2010). Since then he has started to submit in a fairly clear way with in particular the index that more than any others has represented this hegemony (the Nasdaq) to suffer the major calm.
- The euro has experienced the best weekly performance since 2009 By strongly appreciating both against the main currencies of developed countries and against those of emerging countries. The reasons are varied: probable end of the long phase of strength of the American dollar left in 2008 (when the EUR/USD gearbox was at 1.60), Delta Tassi vs Rest of the world falling and above all, political ads in important Europe. As evidence of the significance of the event numerous Investment Banks have greatly raised the EUR/USD change targets very much; JpMorgan and Bofa Merrill Lynch, just to name someone.
- Interest rates in Germany have recorded the highest daily increase from 1997 to today (over 30bps on the tenth anniversary as can be seen from the Financial Times graph), after the country has announced that it wants to increase state investments and the Landers to improve growth, proposing a package of exceptional size interventions (800 billion euros). An event that, if confirmed at the implementation level, is epochal for a country that has always had an obsession with the increase in debt and inflationary risks.
4. The performance of sectors and countries outside the radar of investors for a long time has been excellent, Especially in relative terms, going to highlight the strong rotation in place in the last month and a half on the world share markets. At the sectoral level, Food & Beverage, Healthcare, Mineraries and Industrial European species go up and the American American technological and consumer discretion and other higher beta growth sectors are descended. The banks fly on the stock exchange almost everywhere in the world, with overturned performances that have incredible as the graphic designer of the Financial Times and reworked by Banca Sello Sella & C. shows us. On a geographical level, China is back on the track with excellent performances and with various brokers and assets mangers to brindle at the return of the town of the Rising Sun among the investable markets (if it ever came out …). Europe (Stoxx600 +8%) has been above the United States since the beginning of 11 percentage points (S&P400 -3%).
