The Year America's Economic Edge Evaporated

It’s the time of year when investors peek at their accounts to see whether it will be champagne and caviar to celebrate the holidays or beer and chips. The MSCI USA Index’s 16.3% gain would suggest the former is on the menu, and yet, the latter might be more appropriate.

Yes, stock gains have comfortably exceeded the long-term average for a third straight year. But the result hardly ratifies President Donald Trump’s oft repeated assertion that the US is the world’s “hottest” country. Stacked up against the rest of the world, America’s stock market looks like an also ran: The MSCI USA’s advance pales next to the 29.2% surge in the MSCI All Country World Index excluding America.

To understand just how poor this performance was, consider that nothing of this magnitude has happened since 2009, when the global economy began to recover from the financial crisis. Stocks are no anomaly, US bonds and the dollar are relative losers as well.

The best explanation for why investors discounted US assets so soon after The Economist dubbed the American economy “the envy of the world” can be found in the latest OECD forecasts. Coming into 2025, the Paris-based organization predicted the US economy would grow 2.4% for the year, trouncing the rest of the developed world’s 1.9%. Now, the OECD predicts a less optimistic 2%. It sees a further downshift in 2026, to 1.7%, matching the OECD overall.

https://www.bloomberg.com/opinion/articles/2026-01-01/us-stock-market-and-gdp-lost-its-edge-in-2025?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc2NzI5ODUwOSwiZXhwIjoxNzY3OTAzMzA5LCJhcnRpY2xlSWQiOiJUODZTNDhLSVAzTDMwMCIsImJjb25uZWN0SWQiOiJDNjgyQTUwQzJCRDM0MTFCQTgwQjEwQjZEQjczQzM1MSJ9.5nCj62WbJBZVDWalAFN4kySgBiYoGPZ0UwrTwKQRvAo