Global markets outperform the U.S. in 2025

2025-12-30_19-00 • 4m 22s
Contessa Brewer (Correspondent) 00:00.000
The US markets have done well this year, but international markets, some of them have done even better. See Modi joins us now with a look at this global picture in 2025. Which regions in particular?
Seema Mody (Business News Reporter) 00:10.720
This is a fascinating story playing out, Contessa. Nearly every international market have outperformed the S&P 500 this year. You asked which ones? It's China, Japan, Brazil, broader Europe seeing gains of 20 to 40% in 2025. I made this special graphic for you, okay? Amazing.
Seema Mody (Business News Reporter) 00:25.680
With the flags the countries it just shows you how big of an outperformance we've seen in these countries But the story could change next year, Contessa, if we zoom in on Japan specifically. It's benefited from a number of economic and fiscal reforms, excitement around its new
Seema Mody (Business News Reporter) 00:38.720
prime minister, Sane Takaishi's, her stimulus package. But experts at Tenyo Intelligence, they lay out some of the challenges, including tariffs, tensions, recent tensions between China and Japan, and how that could slow down the country's growth prospects next year. If we look
Seema Mody (Business News Reporter) 00:53.120
at China, the big event both investors and foreign policy experts will be watching for is this potential upcoming summit being prepared and the spring between President Trump and President Xi and Beijing. That if that meeting happens, the expectation is that trade tensions will
Seema Mody (Business News Reporter) 01:07.360
continue to be reduced, which would be positive for the broader country's growth story. In Europe, Bank of America strategists they think Germany specifically is poised to outperform as its government continues to accelerate spending on infrastructure and defense equipment.
Seema Mody (Business News Reporter) 01:22.600
Elections, Contessa, will also play a big role. And one specific one we are watching next year is in Japan. On the left, you have President Lula, who is is seeking re-election. On the right, former President Bolsonaro, he's been ruled ineligible due to his prison sentence for
Seema Mody (Business News Reporter) 01:36.640
plotting a coup, but his son recently announcing a run. And in the past, stocks and Brazil have been heavily linked to politics. And what we've seen is when there is a leader from the right who wins, Brazilian equities outperform. If it's the left, they tend to underperform.
Seema Mody (Business News Reporter) 01:51.480
That's why we're watching that one.
Contessa Brewer (Correspondent) 01:52.840
You're focused there a lot on government policies and central banks and the impact that they have. I I have two questions. questions. One, what's your sense of the way that Trump's tariff policy juiced what happened with trade in other parts of the world?
Seema Mody (Business News Reporter) 02:10.560
So, this is an interesting question. One of the big surprises in 2025 to get to your question is the fact that so many international countries have done okay following the unleash of these America first policies. It really started when Vice President J. D. Vance made that
Seema Mody (Business News Reporter) 02:24.400
powerful speech at the Munich Security Council earlier this year where he highlighted a lot of these America first policy The expectation then was, you know, some of the countries overseas that were reliant on the US, perhaps would face some challenges. But in fact, the opposite
Seema Mody (Business News Reporter) 02:38.200
has happened because it basically pushed them to invest in their own countries. You've seen huge stimulus packages across countries like Japan and Germany and that's fueled into their that's fueled their economic growth story and the expectation is that that could potentially
Seema Mody (Business News Reporter) 02:51.240
continue and that's why so many economists that follow these countries, I was reading their notes these past couple days, they're following the budgets of these countries so closely. I was
Contessa Brewer (Correspondent) 02:58.520
talking to Barry Bannister about the consumer in the United States. When I was in China in October for the Macau and NBA China Games, I was really stunned to see the health of the consumer on vacation for Golden Week in China. It does appear that there's sort of been a rebound
Contessa Brewer (Correspondent) 03:16.480
with the Chinese consumers and the spending there. Macau's now on track to recover. Maybe what we saw before the pandemic. How much do you think you're you're looking at consumers, a growing middle class, whether whether it's in India or China or Brazil fueling some of the
Contessa Brewer (Correspondent) 03:34.880
outperformance in the markets.
Seema Mody (Business News Reporter) 03:36.600
An interesting point you make, given the Macau and what you're seeing, that color is so crucial when trying to understand the health of the consumer overseas because they tend to spend uh you know when they feel good about the economy specifically on uh gaming and hotels and
Seema Mody (Business News Reporter) 03:50.680
hospitality. And so, you know, that's a type of data that I think we're going to be watching in the coming months to see whether this consumer, specifically in the middle class and emerging markets, will continue to spend A lot of a lot times it's directly linked to whether
Seema Mody (Business News Reporter) 04:02.280
they're getting the support from the government. But in specifically in China, there's the subsidies, there's the different Yes economic reforms that plays a role in whether they feel good about their pocketbook and whether they want to spend.
Contessa Brewer (Correspondent) 04:12.080
And also whether they're choosing to spend on experiences versus say luxury goods, which is something that we've seen happen and unfold here in the United States. My sense from covering travel is Yeah.