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CNBC
5 days ago
- Business
- CNBC
Global stock markets' best and worst performers in a Trump-fueled 2025 — and where they're headed
Global stocks have surged to unprecedented levels in the first half of 2025, even as U.S. President Donald Trump's tariff salvos ripple across the globe. Here are the top winners and losers globally, as well as where they're headed. The MSCI All Country World Index, which measures the performance of over 2,500 stocks from both developed and emerging market equities, rose nearly 10% since the start of the year to hit a record high on July 4. European equities have emerged as the surprise stars of 2025, with Greece, Poland, Czech Republic and Spain leading the world in year-to-date gains, according to data collated by Morningstar for CNBC. In comparison, U.S. equities climbed comparatively lower in light of wavering confidence in American assets following Trump's erratic policymaking. "The global trade war that the U.S. started has been, and will continue to be, the catalyst for this ex-U.S. outperformance," said Peter Boockvar, chief investment officer at Bleakley Financial Group. Meanwhile, South Korea stands out as Asia's best performer amid the region's divergent performances, while Thailand, Turkey, Indonesia and Saudi Arabia languish at the bottom of the global rankings. Europe's renaissance Greece was the best-performing stock market year-to-date with gains of almost 60%, and market watchers say there's room for further surge. "Greece has been a standout in Eastern Europe for some time, supported by a recovering economy, banking sector reforms, and strong tourism," said Gabriel Sacks, Aberdeen's investment director of global emerging markets equities. The government's commitment to fiscal surpluses and early repayment of bailout loans have also lifted investor confidence. George Efstathopoulos, multi-asset portfolio manager at Fidelity International, expects Greek equities to continue outperforming, adding that Greek equities are heavy on banks, which have been beating expectations and guiding higher. European markets have been the standout performer globally in the first half of the year. Morningstar Michael Field Poland and the Czech Republic came in as second and third-best performers, gaining 56% and 52% year-to-date, respectively. Among the top ten performers, eight come from European markets. Aside from Greece, Poland and the Czech Republic, other names include Spain, Italy and Germany. Market watchers attribute Europe's rally to a cocktail of recovering growth, undervaluation, and capital rotating out of U.S. stocks earlier in the year as confidence in American assets gets increasingly tested. "European markets have been the standout performer globally in the first half of the year," said Morningstar's EMEA chief equity market strategist, Michael Field, attributing the inflow to the "sell America" movement earlier in the year, as well as an improving economic situation in Europe. The positive sentiment was echoed by Schwab Center for Financial Research's Michelle Gibley, who attributed Germany's pivot away from austerity as part of the reason for Europe's growth. Additionally, Trump's tariffs will continue to create conditions for European growth to ignite, market strategists polled by Natixis believe, who added that European defense stocks could continue to offer sizable returns. European defense stocks and bank sectors, which are key to the region's market performance, are also less exposed to tariff wars, said Mark Mobius, chairman of Mobius Emerging Opportunities Fund. Comparatively, Morningstar's U.S. stock market gauge rose by only around 7%, placing it further down the list in terms of its performance year-to-date. However, the exodus of American assets, which accelerated in April this year, has largely reversed its course with the major benchmarks, S & P 500 and the Nasdaq Composite, recently scaling record highs. Asia's diverging performance Among a mixed performance from Asian benchmarks, South Korea has staged an impressive comeback in 2025, posting a rally of over 30% year-to-date and taking the regional pole position. Despite domestic political turmoil and a 25% levy on exports to the U.S., the country's market outlook remains "looking reasonably good" as the tariff rate was already priced in, said Daniel Yoo, global strategist at Yuanta Securities. He added that there is a chance of a lower rate if the negotiation continues until August 1, which is when tariffs announced back in April will kick in, for countries that have not reached an agreement. The market also believes that Korean exporters may be able to withstand these levies better, as much of the price increase could be absorbed by U.S. consumers, said Manishi Raychaudhuri, chief executive officer at Emmer Capital Partners Limited. On a fundamental level, the election of a new president from the opposition earlier this year lifted investor sentiment and raised hopes for long-awaited corporate governance reforms, said Morningstar's senior equity analyst, Kai Wang, who noted the outperformance of key sectors, such as shipbuilding and advanced high-bandwidth memory chips that are increasingly used in AI processors. In June, opposition leader Lee Jae-myung won the nation's snap presidential election following months of upheaval sparked by former president Yoon Suk Yeol's failed attempt to impose martial law. China, which found itself in the Trump administrations' crosshairs for the larger part of this year, rose over 17% year-to-date. Looking forward to the rest of the year, HSBC sees catalysts from a potential appreciation of the yuan, improvements in earnings as well as policy support. However, the bank's Head of Research at HSBC Qianhai Securities, Steven Sun, said that the country's overall economic growth may continue to face pressure with no bazooka stimulus in sight. The Laggards: Thailand and Turkey At the bottom of the league table is Thailand. The Southeast Asian nation's stock market has slumped over 13% since the start of the year amid political turmoil, corruption scandals, economic woes and the drag of U.S. auto tariffs on its crucial auto parts export sector. "Thailand continues to struggle with a sluggish post-Covid recovery. Tourism remains below pre-pandemic levels, and political instability is weighing on consumer confidence," said Aberdeen's Sacks. Recently, the country's prime minister, Paetongtarn Shinawatra, was suspended from office by the constitutional court over a leaked phone conversation with former Cambodian leader Hun Sen, which led to a petition from 36 senators accusing her of dishonesty and breaching ethical standards. Turkey, whose stock markets are faring second last in performance, has economic headwinds that are equally pronounced, with political repression and runaway inflation spooking investors. "The arrest of Istanbul's mayor dashed nascent signs of optimism," said Sacks, who sees little chance of a sustained recovery without credible policy shifts. Mobius added that the country's currency collapse has also exacerbated the loss of investor confidence and capital flight. The Turkish lira depreciated almost 13% against the greenback since the start of the year. Rounding things off… That said, to put things into context — 2025 has been a fairly bullish year so far for equities, with only five stock markets posting losses year-to-date, according to Morningstar's equity gauges. "The worst of negative shock surprises may be behind us post Liberation day, " said Fidelity International's Efstathopoulos, who was referring to the name Trump gave to his sweeping tariff policy on April 2. While uncertainty is still high, he noted that a key market like China is stimulating its economy, and that the Federal Reserve has been on the path of easing, albeit slowly. "The most fiscal conservative government, Germany, has ended decades worth of fiscal austerity, all of which should be a positive for global growth," he said. Despite a slew of headwinds in the first half of the year, investment markets did well and displayed resilience, said OCBC's investment strategy managing director, Vasu Menon, though he added that he expects volatility to remain in the second half of the year as global uncertainties remain a fixture. "However, do not be surprised if investment markets continue to overcome headwinds and do well in the second half too – especially if concerns about trade, tariffs and inflation ease in the coming months," he said.
Yahoo
11-06-2025
- Business
- Yahoo
Investors pull out of US stocks and into Europe and emerging markets
By Patturaja Murugaboopathy (Reuters) -Global investors have moved money from U.S. equities and into European and emerging markets assets, as concerns mount over U.S. fiscal policy, rising debt and the risk that trade tariffs will trigger a recession. Equity mutual funds and exchange-traded funds, or ETFs, domiciled in the United States saw outflows of $24.7 billion in May, the largest in a year, data from LSEG Lipper showed. By contrast, European funds attracted $21 billion in May, lifting year-to-date inflows to $82.5 billion, the highest in four years. Data for 292 emerging market equity ETFs showed inflows of $3.6 billion last month, bringing total inflows this year to $11.1 billion. Analysts said the dollar's weakness and the selloff in U.S. Treasury bonds have eroded the safe-haven appeal of U.S. assets, driving capital into markets with appreciating currencies. European markets have outperformed U.S. peers this year, helped by lower interest rates and optimism over Germany's 1-trillion-euro stimulus plan. The European Central Bank cut interest rates for the eighth time in a year last week in an effort to support the economy, even as it warned of rising trade risks with the United States. Michael Field, chief European market strategist at Morningstar, said the shift from the United States to Europe was initially driven by valuations but increasingly has been fueled by a change in investor sentiment. "With investors rattled by the U.S. administration's actions and worried about the potential drag on equity markets, this may mark the start of a medium-term trend." Since the start of the year, the MSCI United States index has gained 2.7%, while MSCI Europe has risen about 20% and MSCI Asia Pacific is up 10%. Emerging market equity funds have also attracted money flows because of improving fundamentals, with Latin America seen as a safe option as trade and military conflicts elsewhere make investors seek more stable regions. Asian economies are increasingly driven by domestic consumption. Manish Raychaudhuri, founder and CEO of Emmer Capital Partners Ltd, said lower debt and stronger growth made Asian equities better positioned to benefit from U.S. capital outflows compared with European ones. "While Italy, France and the UK face rising debt burdens, many Asian economies carry lighter fiscal loads, keeping bond yields stable and investor confidence intact." The forward 12-month price-to-earnings ratio for MSCI U.S. stood at 20.4, compared with 13.5 for MSCI Europe and 14.2 for MSCI Asia Pacific. (Reporting By Patturaja Murugaboopathy; editing by Barbara Lewis)
Reuters
11-06-2025
- Business
- Reuters
Investors pull out of US stocks and into Europe and emerging markets
June 11 (Reuters) - Global investors have moved money from U.S. equities and into European and emerging markets assets, as concerns mount over U.S. fiscal policy, rising debt and the risk that trade tariffs will trigger a recession. Equity mutual funds and exchange-traded funds, or ETFs, domiciled in the United States saw outflows of $24.7 billion in May, the largest in a year, data from LSEG Lipper showed. By contrast, European funds attracted $21 billion in May, lifting year-to-date inflows to $82.5 billion, the highest in four years. Data for 292 emerging market equity ETFs showed inflows of $3.6 billion last month, bringing total inflows this year to $11.1 billion. Analysts said the dollar's weakness and the selloff in U.S. Treasury bonds have eroded the safe-haven appeal of U.S. assets, driving capital into markets with appreciating currencies. European markets have outperformed U.S. peers this year, helped by lower interest rates and optimism over Germany's 1-trillion-euro stimulus plan. The European Central Bank cut interest rates for the eighth time in a year last week in an effort to support the economy, even as it warned of rising trade risks with the United States. Michael Field, chief European market strategist at Morningstar, said the shift from the United States to Europe was initially driven by valuations but increasingly has been fueled by a change in investor sentiment. "With investors rattled by the U.S. administration's actions and worried about the potential drag on equity markets, this may mark the start of a medium-term trend." Since the start of the year, the MSCI United States index (.dMIUS00000PUS), opens new tab has gained 2.7%, while MSCI Europe (.dMIEU00000PUS), opens new tab has risen about 20% and MSCI Asia Pacific (.MIAP00000PUS), opens new tab is up 10%. Emerging market equity funds have also attracted money flows because of improving fundamentals, with Latin America seen as a safe option as trade and military conflicts elsewhere make investors seek more stable regions. Asian economies are increasingly driven by domestic consumption. Manish Raychaudhuri, founder and CEO of Emmer Capital Partners Ltd, said lower debt and stronger growth made Asian equities better positioned to benefit from U.S. capital outflows compared with European ones. "While Italy, France and the UK face rising debt burdens, many Asian economies carry lighter fiscal loads, keeping bond yields stable and investor confidence intact." The forward 12-month price-to-earnings ratio for MSCI U.S. stood at 20.4, compared with 13.5 for MSCI Europe and 14.2 for MSCI Asia Pacific.
Yahoo
11-06-2025
- Business
- Yahoo
Investors pull out of US stocks and into Europe and emerging markets
By Patturaja Murugaboopathy (Reuters) -Global investors have moved money from U.S. equities and into European and emerging markets assets, as concerns mount over U.S. fiscal policy, rising debt and the risk that trade tariffs will trigger a recession. Equity mutual funds and exchange-traded funds, or ETFs, domiciled in the United States saw outflows of $24.7 billion in May, the largest in a year, data from LSEG Lipper showed. By contrast, European funds attracted $21 billion in May, lifting year-to-date inflows to $82.5 billion, the highest in four years. Data for 292 emerging market equity ETFs showed inflows of $3.6 billion last month, bringing total inflows this year to $11.1 billion. Analysts said the dollar's weakness and the selloff in U.S. Treasury bonds have eroded the safe-haven appeal of U.S. assets, driving capital into markets with appreciating currencies. European markets have outperformed U.S. peers this year, helped by lower interest rates and optimism over Germany's 1-trillion-euro stimulus plan. The European Central Bank cut interest rates for the eighth time in a year last week in an effort to support the economy, even as it warned of rising trade risks with the United States. Michael Field, chief European market strategist at Morningstar, said the shift from the United States to Europe was initially driven by valuations but increasingly has been fueled by a change in investor sentiment. "With investors rattled by the U.S. administration's actions and worried about the potential drag on equity markets, this may mark the start of a medium-term trend." Since the start of the year, the MSCI United States index has gained 2.7%, while MSCI Europe has risen about 20% and MSCI Asia Pacific is up 10%. Emerging market equity funds have also attracted money flows because of improving fundamentals, with Latin America seen as a safe option as trade and military conflicts elsewhere make investors seek more stable regions. Asian economies are increasingly driven by domestic consumption. Manish Raychaudhuri, founder and CEO of Emmer Capital Partners Ltd, said lower debt and stronger growth made Asian equities better positioned to benefit from U.S. capital outflows compared with European ones. "While Italy, France and the UK face rising debt burdens, many Asian economies carry lighter fiscal loads, keeping bond yields stable and investor confidence intact." The forward 12-month price-to-earnings ratio for MSCI U.S. stood at 20.4, compared with 13.5 for MSCI Europe and 14.2 for MSCI Asia Pacific. (Reporting By Patturaja Murugaboopathy; editing by Barbara Lewis) Sign in to access your portfolio
Business Mayor
17-05-2025
- Business
- Business Mayor
3 Surprising Market Winners in 2025
Investors brave enough to peek at their account statements recently know that US stocks have had a rocky 2025. Even before tariff-related volatility, DeepSeek AI's launch clouded the major technology theme that powered the market in 2023 and 2024. According to my colleague Dave Sekera, AI stocks entered a bear market in March. The best-known investment bright spot in 2025 has thrived in response to uncertainty. You've probably heard about the price of gold shooting up, as panicky investors flee to a millennia-old store of value. Gold was also a shelter in the storm in 2022, when inflation triggered double-digit losses in stocks and bonds. But there have been equity gains to be had in 2025. Especially outside the US, some asset classes are thriving. When I look at year-to-date returns for Morningstar's extensive range of equity indexes, I notice a few surprising stars: European stocks, Latin America, and real estate investment trusts. What's the common thread that connects the three? All had been underperformers in prior years. Some Global Equity Asset Classes Have Thrived in 2025, Even as US Stocks Are Negative undefined European Stocks Have Been Made Great Again Morningstar's European stock index is riding high this year. 'The macroeconomic environment has been improving in Europe,' says Michael Field, Morningstar's chief Europe market strategist. The financial-services sector is a key beneficiary, with names like Banco Santander SAN, UniCredit UCG, and HSBC HSBA soaring. Then there's Germany's newfound interest in deficit spending and the continent's focus on military self-sufficiency, spurred by the Donald Trump administration. Spiking share prices for defense stocks like Rheinmetall RHM and BAE Systems BA. tell that story. US tariff announcements caused sharp selloffs in Europe, as they did across the globe, but the recovery has been V-shaped. A weakening US dollar has magnified European equity gains for unhedged US investors. It doesn't hurt that, unlike the US Federal Reserve, the European Central Bank and the Bank of England have actually been cutting interest rates. Coming into the year, my research and investment colleagues called Europe 'the most attractive developed-markets region globally.' The 'Magnificent Seven' era of US equity market exceptionalism left European stocks in the dust, plagued by slow-growth and an 'old economy' orientation (with some notable exceptions like semiconductor manufacturing enabler ASML ASML and weight-loss drugmaker Novo Nordisk NOVO B). Years of underperformance created a valuation opportunity. Europe is home to many high-quality global businesses, whose share prices were discounted because of their domicile. Regardless of valuation, European stocks are worthy of inclusion in a diversified portfolio. Latin America: Can the Revival Last? South of the US border, stocks are rallying. Morningstar's Latin American equities index is up more than 22% so far in 2025, thanks to Brazil, Mexico, and the smaller markets of Colombia and Chile. Here, too, a weakening dollar has boosted equity returns for unhedged US investors. Latin America is seen as a relative winner from Trump tariffs. Corporate earnings have also been strong. This marks quite a turnaround. The Morningstar Brazil Index and the Morningstar Mexico Index both suffered losses of more than 25% in US dollar terms in 2024. Brazil, for its part, faces serious fiscal challenges. In Mexico, sentiment was dented by election results on both sides of the border. Mexican President Claudia Sheinbaum and US President Donald Trump were both perceived as negatives for Mexican stocks. As with Europe, Latin American stocks looked like a real bargain coming into this year. In Morningstar's 2025 Outlook, my colleagues on Morningstar's research and investment team wrote that 'concerns about Mexico and Brazil appear exaggerated.' In fact, they identified Brazil as the highest potential global equity market for the coming 10 years. Latin American stocks are volatile but could hold more upside. Read More Shell profits to halve as oil prices slump REITs, Especially Those Outside the US, Outperform Real estate investment trusts are also up double digits this year—outside the US. The strength spans developed markets like Europe, Japan, and Australia, as well as emerging markets like Mexico, India, and South Africa. Property sectors in many geographies are vibrant, bolstered by low or falling interest rates. What about the US? The Morningstar US REIT Index is well behind the Morningstar Global Markets ex-US REIT Index in 2025, but it's in positive territory, ahead of the broad US equity market. US interest rates that appear to be staying higher for longer are seen as a negative for real estate. That said, REIT yields are attractive, and property is a 'real asset' that can act as an inflation hedge. Morningstar equity analysts continue to see upside potential in the sector. REITs span an array of types—from Kilroy Realty KRC in office space, to Healthpeak Properties DOC, to Americold Realty Trust COLD, which owns and operates cold storage warehouses. All are currently considered undervalued by Morningstar equity analysts. REITs, Especially Outside the US, Have Performed Well in 2025 undefined Diversification Assures Exposure to Unloved Asset Classes US mega-cap technology-oriented stocks did so well for so long that many investors thought they were the only game in town. Coming into 2025, it was hard to envision how the Magnificent Seven could ever be knocked off their perch. The rise of artificial intelligence, widely viewed as 'bigger than the internet,' seemed inexorable. No one saw DeepSeek AI coming, and few predicted the degree to which tariffs would disrupt. Gravity is a powerful force in investing, too. US stocks, especially on the growth side of the market, posted returns in 2023 and 2024 that far exceeded their historical levels. Their losses in 2025 can be seen as a reversion to the mean, or a return to long-term averages. Along these lines, I recommend a study by my colleague Jeff Ptak, who called buying into popular investment types a 'bad idea.' The surprising winners of 2025 show that investment performance is dynamic. Yesterday's stars can fall, and zeros can become heroes. Contrarian bets can be profitable, though they can also take time to pay off. Investors who diversify by geography, style, and market capitalization are also well placed to benefit from leadership change. The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
