1. 2025 year-to-date.

Germany > Italy > France > UK > US

JPMorgan analysts expect the S&P 500 to remain range-bound between 5,200 and 6,000 in the near term, citing ongoing market volatility, policy uncertainty, and investor positioning risks.

"The US Exceptionalism trade has been experiencing turbulence" as a mix of policy uncertainty and weaker economic data has led to a sharp unwinding of momentum trades.

Investor sentiment has also soured, with the American Association of Individual Investors (AAII) sentiment index "collapsed to levels consistent with major market bottoms."

However, the bank maintained a year-end target of 6,500, “as the probability of this growth scare turning into a recession remains a low risk" due to factors such as lower borrowing rates, a weaker U.S. dollar, and healthy corporate and consumer balance sheets.
 

“We expect the market to restrengthen later in the year, driven by a potential policy pivot from the Trump administration and ongoing AI-driven productivity gains.”

2. The Euro had its best week since 2009 as the tariff trade is dead.

The fact that Germany is setting in motion a significant shift, “potentially transforming it from a fiscal detractor to a fiscal stimulator,” is nothing less of a seismic shift.

So much so, that a global trade war and geopolitical developments took the backseat.

Also, the fact that USD could not rally on the announced Trump tariffs was a clear sign to currency traders.

The market is saying that the tariffs will be removed, or they are priced in, or both.

We are moving on to new themes and tariffs have lost their relevance to FX markets for now.

And even if we get fresh tariff announcements targeting Europe, the market will keep considering them as just a tactical play that will provide intraday volatility but will have no long-term lasting effect.

If the tariff theme is indeed dead, lower US growth could weigh further on USD sentiment. Stephen Jen, the chief executive of London-based asset manager Eurizon SLJ Capital, said that the dollar is about 20% above its fair value and while he doesn’t think there’s going to be a crash, “it’s a multi-year adjustment.”

3. Value is back in vogue.

In the new world of European stock market dominance against the US, cheaper value stocks are looking like the go-to for investors angling for more gains.

After Europe’s 10% rally year-to-date and historic outperformance versus the US, funds are weighing whether the stellar run has further to go. A rotation into value has paid off with banks on a roll, and now the move is reaching sectors such as autos and miners.

The value factor has been one of the best this year, up 8.6% on a long-only basis, and strongly outperforming growth’s mere 2.9% rise.

“The rotation out of growth and into value style should help international markets, which are more value dominated,” say JPMorgan strategists Mislav Matejka.

“For euro zone to keep rallying, we believe a turn in earnings is needed.”

Valuations are not yet a worry, especially on a relative basis. Value stocks have barely started their re-rating process and are still trading at a 50% discount to growth peers, based on forward P/E ratios.

On an absolute basis, the MSCI Europe Value index trades at about 11 times forward earnings.

4. US “exceptionalism” has been borrowed?

The US National Debt is currently at $36.6T or $323K per taxpayer.

The DOGE savings are pretty small per taxpayer.

Source: https://www.usdebtclock.org/

5. 2025 has started out relatively strong for electric vehicles.

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