The US exceptionalism, the notion that the US economy and its financial markets are clear compared to other economies, lives on, at least according to the stock market.
According to the data source TradingView, the Tech Heavy Nasdaq Index on Wall Street has grown by 31%, with the S&P 500 index increasing by 24% since the slide in early April. Other major indices such as Germany’s DAX, France’s CAC, Japan’s Nikkei and China’s Shanghai composites are lagging behind Wall Street.
The NASDAQ and S&P 500 traded at record highs on Thursday. As Coindesk pointed out last month, demand for the US Treasury is maintained amid concerns about fiscal sustainability.
The data contradicts the general narrative that capital flows are evacuating the United States due to debt insecurity and President Donald Trump’s repeated criticism of the trade war and the Federal Reserve.
“Some key factors that underpinned US exceptionalism remain completely intact and perhaps even further strengthened,” wrote Hani Redha, Head of Strategy and Research at Pinebridge Investments, in a blog post published last month.
Redha pointed to deregulation under Trump as an important factor supporting the US productivity supercycle. It is unique and global leader among global peers.
The economy examines US exceptionalism
Other economic variables, such as actual per capita GDP growth, also support exceptional narratives. Metrics measure the rate at which the value of goods and services generated per person in the economy is adjusted to inflation.
“The US has far surpassed the EU in terms of actual per capita GDP growth. The reason is deeply structural and has not changed a bit. At least US exceptionalism for growth is…
US employment data released Thursday also added another stock to “loss of the American exceptionalist narrative.” According to LinkedIn, Bruce J Clark, director of fees at Informa Global Markets.
Impact on BTC and DXY
The return of US exceptionalism to US stocks can be seen as a positive development in Bitcoin
And, given the historical positive correlation between the two, the broader crypto market.
According to Coindesk data, BTC, the leading cryptocurrency by market value, has already increased by 44% to nearly $108,000, quickly gathering from nearly $75,000. Furthermore, along with the White House pro-Crypto president, you may argue that Bitcoin is part of an exceptionalist play in the US.
Meanwhile, the return of US exceptionalism could also place the floor under the US dollar. “The temptation to get long dollars here for countertrend trade is growing significantly with employment data today placing another stock in the ‘loss of American exceptionalism’ narrative,” Clark pointed out, adding to the growing discomfort of ECB officials over the powerful euro.
Earlier this week, the FT reported that central banks may need to show that the euro strengthening could be too big, citing senior ECB officials. Meanwhile, in an interview with Bloomberg, ECB vice president Luis de Gindes said they should avoid “overshooting” the euro and complexly flag the level above 1.20.
