Could the rising influence of emerging markets rewrite the story of American exceptionalism in the global economy? Rapidly expanding economies in emerging markets are riding in with promising opportunities for diversification and growth.
Growth in the US has surpassed that of major economies, with its equity markets reaching all-time highs in 2023, largely driven by the performance of the Magnificent Seven (Mag 7). Its performance has reignited the discussion on American exceptionalism and its underlying factors. Noura Tan delves into the unique characteristics and strengths of the US economy that have contributed to its resilience and outperformance; while also examining potential challenges and factors that could impact the duration of this exceptionalism. By gaining a deeper understanding of the evolving dynamics between developed markets (DMs) and emerging markets (EMs), we can better assess the global economic landscape and how this shift will shape investors’ approach to EMs.
How ‘great’ is America? In recent years, the spotlight has returned to the notion of American exceptionalism, given the performance of the US economy and its equity markets.’
While major economies faced stagnation and even contraction in 2023, the US has maintained a post-pandemic upswing spanning 16 quarters, with only minor disruptions in 2022. Contrary to global trends and despite the Federal Reserve’s aggressive monetary policy, it has showcased steady economic growth, fuelled by a strong labour market and robust domestic consumer demand.
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