Currently Wall Street is excited over the chance that the Feds could cut interest rates by July. S&P 500 index traded at all-time highs, showing positive investor sentiment. However, some experts feel that it was time investors thought about better and bigger opportunities outside USA like India and China. Chris Gaffney of TIAA Bank stated that current valuations of stocks in these markets were at considerably higher levels than those in USA. S&P 500 is currently 18% up this year. NASDAQ has surged by 20% this year as well. However, the likelihood of rate cuts as stated by Jerome Powell, current Fed chair, and the possibility of many more to come later this year has made the dollar tank. This would cause international stocks to look more attractive since having a weak dollar raises stock prices in international markets.
Emerging markets now can perform well due to falling USD, stated Oliver Marciot of Unigestion. Bond investors can also find a lot of better options. Here, breathing room is more, along with higher interest rates, stated Mike Collins of PGIM FI. He stated that with falling global inflation levels, many banks are likely to follow suit. However, there are some who are still worried as the US-China threat looms. Nancy Davis of IVOL stated that while bond markets are down, stock markets are rising steadily
Davis favors diversification and suggests international market investments. However, most markets have risen well this year, causing a limited number of value options. Hugo Rogers of Deltec states that the best market might yet be the US since stocks will keep rising due to Fed rules and actions. While international markets have better options, Japan, Europe, India, and China all have geopolitical risks involved. Global investments carry the risk of Trump tariffs at any moment, which is why he recommended proceeding with caution.
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