Tom Lee Rejects 'End Of American Exceptionalism' Narrative, Says Says US Still Home To World's Best Companies Despite Dollar, Yield Fears
Tom Lee, the Head of Research at Fundstrat Global Advisors, isn’t buying this narrative of “America in decline” or the “end of American exceptionalism” that is gaining steam in recent weeks.
What Happened: Lee said on Monday that he is not in the same camp as those who believe that “U.S. exceptionalism is over.” During an interview with CNBC’s “Squawk Box,” Lee was asked about the potential worst-case scenario involving a weakening dollar, rising yields, and foreign capital pulling out of U.S. assets.
Lee does not believe that this selling of U.S. Treasuries and dollars for other assets is sustainable, not unless “weaker dollar and higher yields suddenly lead to the best companies in the world being outside the U.S.”
“The best and most important companies in the world are American companies, they produce the best shareholder returns,” Lee adds, implying that U.S. assets will always be in demand, even if the treasuries and the dollar fall out of favor among foreign investors.
Lee cited the example of the S&P 500 Index, tracked by SPDR S&P 500 (NYSE:SPY), saying that, “40% of the returns of the S&P comes from new companies every 10 years,” before asking, “Will the best new companies be coming from Europe instead of the U.S. because of the [weakened] dollar? I doubt it.”
Why It Matters: Lee has been a vocal critic of the tariffs, calling the rates imposed “absurd” and a “dark comedy” owing to their arbitrary nature and lack of any economic rationale.
Lee has, however, been optimistic about the market’s performance going forward, predicting a “V-shaped recovery” while admitting that it was going to “take a little time for the markets to regain some trust.”
Other leading banks and analysts, however, don’t share the same optimism, with Deutsche Bank AG saying that we are witnessing “a simultaneous collapse” with the markets having “lost faith in U.S. assets,” before calling it an “uncharted territory.”
French financial services company, Societe Generale SA, referred to Trump’s tariffs and the rise of China’s Deepseek as a “pause in American exceptionalism,” reported in The Globe and Mail early this month.
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Posted-In: Fundstrat Global Advisors tariffs Tom LeeNews Economics Markets
