Cautious Global Optimism

International investments have turned positive for the year relative to U.S. equities. It’s been a long wait for foreign assets to provide reasonable returns relative to the U.S. 

What’s driving this change in fortunes for foreign equities is the concern in global business communities about the U.S. financial solvency given significant debt. In addition, currency fluctuations have created an environment that in some cases benefit companies that do business outside the United States.

However, there still remains significant uncertainties in the international space. The recent headline that the administration was looking to put 100% tariffs on Chinese products because of controls on rare earth minerals is an example that tariff concerns are not fully in the past.

As DWM invests assets, we often times invest in equity assets that have a global presence. This means that while the asset itself is domiciled from a corporate headquarter standpoint in the United States, that is not necessarily where all the revenue comes from. Currency exchange rates can positively impact the earnings for these companies.

We will continue to monitor conditions and may adjust international positions depending on the data. You can be assured that we are being cautious as we invest to avoid walking into unpleasant consequences related to international trade such as recent China/U.S. trade conflicts (an article from CNBC outlined the current drama. Excerpt provided below).

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“The U.S. stock market erased about $2 trillion in value on Friday in response to Trump’s tariff threat against China. The White House watches the market, Greer said, but the administration is focused on building long-term economic success by bringing supply chains back to the U.S., and reducing dependence on China.

“We want to make sure that the market is also responding to appropriate information,” Greer said. “You’ve seen the market settle out this week as they realize that the president and his team, we want to work with the Chinese.”

Rare earths are critical minerals used to manufacture magnets, which are key inputs in U.S. weapons platforms, electric vehicles, the semiconductor industry and other applications.

China controls about 60% of rare earth mining and more than 90% of refining worldwide, according to the International Energy Agency. The U.S. is dependent on China for roughly 70% of its rare earth imports, according to the U.S. Geological Survey.”

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Source: https://www.cnbc.com/2025/10/14/trump-trade-china-tariffs-greer.html