NDR: Trade war concluding?

Following the Trump-driven rally that pushed equities to record highs, trade war fears in February-March triggered excessive pessimism, leading to U.S. mega-cap selloffs, MSCI U.S. underperformance, and a weaker dollar. Meanwhile, Europe ex-U.K. and emerging markets (chart above) benefited, along with gold, while Tech stocks lagged. This led to position shifts, including a bearish dollar stance, a move from cash to bonds, and reallocations that downgraded the U.S. to marketweight while upgrading Emerging Markets. 

However, despite speculation of a global leadership shift, there’s insufficient evidence for further reallocation. If breadth thrust signals confirm a bottom, Tech and the U.S. could regain strength, tempering gains in Europe and emerging markets.

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