Rockefeller International chair warns of a US market "bubble" and predicts global stocks will outperform in 2025
Ruchir Sharma, chair of Rockefeller International and founder and CIO of Breakout Capital, highlighted concerns about a potential bubble in US equity markets during an interview with BNN Bloomberg on Thursday.
Sharma noted that the consistent outperformance of US equities over the past 15 years, combined with their significant share in global benchmarks, appears unsustainable.
Sharma stated that US equities now account for nearly 70 percent of the global equity benchmark, despite the US economy comprising less than 30 percent of the global economy.
“This is a huge disconnect between America’s market cap in the global equity indices and America’s weight in the global economy,” Sharma explained.
He added that the exceptional performance of US markets has been “turbocharged” by the strength of the US dollar, which he described as looking “very strethed and very overvalued.”
While Sharma emphasized that he is not “worried” about the US market, he raised concerns about the growing gap between US markets and global markets, coupled with the perception that this trend “can only continue.”
He referred to this sentiment, along with the strength of the US dollar, as “bubbly” and suggested that US stocks could face a correction this year.
“I think that it’s possible we get a significant correction, but my stronger view is that America’s outperformance versus the rest of the world can’t continue at this pace,” Sharma said.
He predicted that global equities are likely to outperform US stocks in 2025.
Sharma framed this perspective as a “contrarian view” and noted the rarity of such opinions.
“Very few people, if any, are willing to bet on that, which only gives me greater confidence that groupthink has never been stronger,” he said.
He added that the best way to make money in financial markets is to bet against strong conventional wisdom, as is the case today.
