Foreigners now hold a record $9.5 trillion in Treasury securities. This is a sign that the dollar is expected to continue to appreciate, which is deflationary because a strong U.S. dollar lowers the price of imported goods. The United States clearly remains the economic engine of the world.
The next few weeks should be stunning as fundamentally superior stocks report better than expected results. On Wednesday, reported annual sales growth of 41% and profit growth of 58%, beating analysts’ expectations, getting many investors excited about data center and AI stocks.
Tensions with the United States and Iran will persist, but as the Iranian army has been deactivated, the presence of the American navy in the Strait of Hormuz will eventually allow maritime traffic to resume, once the area is cleared. Investors should therefore expect the global economy to return to normal in the coming months.
President Trump told Maria Bartiromo on Wednesday that the war with Iran is “almost over.” There are now 121 tankers, including 68 very large crude carriers (VLCCs), heading to the United States to load crude oil. As a result, the U.S. trade deficit is expected to plunge due to soaring energy exports.
President Trump was immensely proud that so many tankers were heading to the United States and that energy exports were increasing. Whether or not expanding U.S. energy exports was part of the “master plan” after the attacks on Iran began is open to debate. Regardless, American influence over global energy markets now remains more dominant than ever.
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