Key insights
- The author argues that US equity markets are rising due to decreased investment attractiveness in other major economies (Europe, China, Japan) stemming from geopolitical risks (Hormuz) and energy crises. The US advantage in AI and aerospace/defense further concentrates global investment flows into US assets, creating bullish conditions for US equities.
It's because the rest of the world has become much less investable.
The closure of Hormuz ironically/intentionally affects the USA the least out of all the major powers, with the exception maybe of Russia, who is also uninvestable.
Europe already has an energy crisis. 45-50% of China's oil supply flows through Hormuz, and the rest of Southeast Asian & Japan are completely fucked.
And by fucked I mean their economies are simply going to have to slow down + inflation.
Tack on the fact that the US is significantly ahead in AI technology/buildout and aerospace/defense, and you really have no other choice in terms of where to invest your money.