This week in charts
Asset class returns by year (including 2025 YTD)
Europe-focused equity fund outflows
Foreign holdings of U.S. Treasuries
Median age of homebuyers increasing
S&P 500 Index profit margins
Equity market capitalization
Homebuilders vs. S&P 500 Index
S&P 500 Index Q4 2024 earnings
Trump’s Tariffs
European outperformance
European stocks outpace Wall Street since Donald Trump took office
European stocks have outpaced the US in the month since President Donald Trump’s inauguration, as hopes rise that the region might escape a worst-case scenario trade war.
The benchmark Stoxx Europe 600 index has gained 5.2 per cent since January 17, the last trading day before Trump re-entered the White House, while on Wall Street the S&P 500 has risen 2.5 per cent and the tech-heavy Nasdaq Composite has advanced 1.7 per cent.
The unexpectedly strong performance of European indices has been driven by Trump’s decision not to impose immediate tariffs on the EU, as well as the prospect of peace talks in Ukraine, said analysts.
The gains come after a prolonged period of Europe underperforming the US, as a huge rally in Big Tech stocks lifted Wall Street in recent years. Trump’s election was the most recent catalyst, pushing European equities to lag the US by the widest margin on record, amid expectations of a bruising trade war.
Europe’s recent strong performance comes despite signs of stagnation in the continent’s major economies and worries over the region’s longer-term security as the US threatens to pull back military support.
The rally has been helped by European fund managers increasing their allocations since the start of the year, with a survey this week showing that the proportion saying the region’s stocks were undervalued was at a six-year high.
Analysts at UBS last week upgraded their allocation to continental Europe to overweight, citing the tailwind of lower energy prices in the event of an end to the Russian full-scale invasion of Ukraine, looser fiscal policy and stronger corporate earnings.
Hong Kong has been the best-performing major index since Trump’s inauguration, with the Hang Seng index rising 15 per cent since January 20, led by a rally in Chinese technology stocks listed in the territory following the DeepSeek shock.
China’s mainland CSI 300, however, has advanced just 3 per cent. The rest of Asia has been more flat, with Japan’s broad Topix up 2 per cent and India’s Nifty 50 down 1 per cent.
However, some analysts expressed doubt over whether Europe’s performance could last through the year, especially if US tariffs were simply delayed rather than diluted.
Trump has warned that imports from Europe may be next in line after the US moved to impose 25 per cent tariffs on Canadian and Mexican imports and an additional 10 per cent levy against Chinese goods.
This week’s fun find
On a Mission to Heal Gila Monsters
By any measure, the diabetes drug Ozempic has been a blockbuster, racking up billions of dollars in annual sales. In the United States alone, pharmacies fill millions of prescriptions for Ozempic and related drugs, which have become popular for their weight-loss effects, every month.
But in the beginning, before the celebrity endorsements and the think pieces and the global supply crunch, there was just a strange, venomous lizard with a flair for intermittent fasting. The Gila monster, which is native to the deserts of North America, can survive on just a few meals a year, thanks to a digestion-slowing hormone in its venom.
The discovery of this hormone paved the way for Ozempic, making the Gila monster an enormously profitable gift to modern medicine. And last summer one particular Gila monster, a former pet named Pebbles, needed medicine in return.
