The United States has been experiencing impressive growth in its economy compared to other G-10 economies in recent years. This trend is expected to continue as the US equity market continues to outperform. However, it is important to note that this American exceptionalism in terms of economic growth is a relatively new development.
The true standout feature of the US economy lies in its stock market performance. As we move further into 2024, the strong performance of both the US economy and US equities remains at the forefront. In a global context where the positive impact of increased household wealth on economic growth is evident, the rising value of financial assets and the overall strength of the economy create a mutually beneficial cycle. After witnessing 15 years of US equity outperformance, the question arises as to whether there are unique and enduring qualities in the US that can sustain this momentum.
One potential factor is the substantial US leverage in the technology sector, although this also presents risks. It remains uncertain whether the current success of the US economy and stock market will be sustained in the long term, with potential challenges and advantages lying ahead as the country navigates through economic cycles. Overall, while there are many factors contributing to this recent trajectory, it is clear that the US equity market plays a crucial role in driving economic growth and stability.
