America’s Market Miracle Fades—Is It Time to Bet Big on India and China?

Jefferies' senior equity strategist, Christopher Wood, has sounded the warning for US stockholders, stating the best days of US equities are over and further losses will probably follow. Wood cites outrageous valuations—US stocks carry a forward P/E of 19.2, significantly above world averages—and points out US market dominance hit a peak in December 2024, which parallels Japan's legendary 1989 bubble.

 

He foresees that the US dollar will decline further, weakening the contribution of American stocks to world market capitalization. Volatile and unpredictable US tariff policy, particularly during Donald Trump's tenure, contributes to uncertainty and recent volatility.

 

As the S&P 500 fell 8.6% this year, behind European and Chinese benchmarks, Wood encourages investors to lower their US exposure and shift to India, China, and Europe. He targets India as one of the best chances, deeming it "seriously under-owned" by world funds.

 

Wood's negative prognostications constitute a stark turn in sentiment that indicates international investors could begin soon to shun US markets and head instead into higher-growing geographies.

 

Sources: Economic Times, CNBC TV18, The Edge Markets