The USA economy & stock market continue to defy economic gravity. The rest of the world isn’t doing as well. The money question for 2024 is: Will the USA’s growth carryover to the rest of the world or will the Global malaise drag down the USA?
The USA’s outperformance isn’t a new phenomenon. Global GPD has been in decline, along with the world’s second largest economy- China. Note the below chart. Since the Great Financial Crisis, both Global GDP & China are trending lower. While both have lower highs and lower lows, China’s underperformance is extreme.
I believe this slowdown is secular in nature and is primarily due to Peak Globalization. The Pandemic and Second Cold War have accelerated the decline.
I recently had a lively discussion about this topic and more with Andrew Horowitz on The Disciplined Investor Podcast. You can listen here: