The Global Bull Market: Examining the Dramatic Outperformance of Global Stocks vs. the US | Jack & Max
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode, Jack Farley and Max Wiethe break down what really happened in global markets during 2025, challenging the narrative that "the U.S. is the only game in town." (03:00) While U.S. equities delivered strong returns with the S&P 500 up in the high teens and Nasdaq up over 20%, global markets quietly outperformed with emerging markets up 34% and countries like South Korea posting a staggering 95.3% return. (04:25) The hosts explore sector-level winners, the ongoing AI trade, precious metals performance, and analyze the biggest risks facing markets in 2026, including AI valuations, private credit concerns, and the growing disconnect between corporate profits and employment.
• Main themes: Global market outperformance versus U.S. dominance narrative, AI trade continuation, precious metals strength, and emerging risks for 2026Speakers
Jack Farley
Jack Farley is a financial analyst and host of Monetary Matters podcast who focuses on macro markets and global investment opportunities. He provides market commentary and interviews with leading financial professionals, with particular expertise in international markets and alternative investments.
Max Wiethe
Max Wiethe is Jack's business partner and co-host who specializes in equity research and market analysis. He conducts additional interviews for Monetary Matters and has deep expertise in sector analysis and global market performance comparisons using platforms like Fiscal AI.
Key Takeaways
Global Markets Outperformed Despite U.S. Narrative
While U.S. markets had strong returns, international markets significantly outperformed across the board. (03:00) The All Country World Index was up 22.4%, beating both the S&P 500 and Nasdaq, while emerging markets surged 34%. This challenges the prevailing wisdom that "the U.S. is the only game in town" and suggests investors missed significant opportunities by staying U.S.-focused. The outperformance wasn't limited to emerging markets - European markets were up 35.6% and Japan gained 25.8%, both exceeding U.S. benchmarks.
AI and Semiconductor Trade Continues Strong
The AI trade showed remarkable resilience and growth throughout 2025, particularly benefiting memory companies and semiconductor suppliers. (09:50) South Korea's 95% gain was largely driven by SK Hynix, a memory company, while countless Asian suppliers to data centers saw gains of 300-400%. Jack emphasizes this is a secular but pro-cyclical trend, where continued capital raising by companies like OpenAI (reportedly seeking $100 billion at $800 billion valuation) keeps the momentum going across the entire ecosystem.
Precious Metals Demonstrated Supply-Demand Imbalances
Silver and gold showed exceptional performance due to structural supply constraints and increasing industrial demand. (23:28) Silver faces unique supply challenges as it's primarily mined as a byproduct of other metals, making supply relatively inelastic even when silver prices rise. Additionally, silver has growing industrial applications in AI infrastructure and electronics, with some uses that cannot be substituted. This creates a compelling investment case for precious metals streaming companies, which offer exposure to these trends with lower operational risk than traditional miners.
Corporate Profits and Employment Are Diverging
A concerning trend emerged where corporate profits soared while labor markets weakened, breaking the historical correlation between employment growth and profit growth. (33:20) This divergence suggests AI and automation may be allowing companies to maintain or increase profitability while reducing their workforce needs. Dan Krausz's research highlighted this disconnect, and it raises questions about whether 2026 could see recessionary labor market readings alongside continued profit growth - a scenario with significant social and economic implications.
Speculative Excess Signals Late-Cycle Behavior
The market showed classic late-cycle speculation with companies having declining revenues for years posting massive gains purely on narrative. (15:50) Examples included QMM Holdings (up significantly despite five consecutive years of revenue decline) and quantum computing stocks that have no near-term commercial viability. This type of speculative excess, where "fake" companies outperform real profitable businesses, typically indicates we're in the later stages of a market cycle, though the timing of any correction remains uncertain.
Statistics & Facts
- South Korea was the best performing major market in 2025, with a total return of 95.3%, primarily driven by memory company SK Hynix. (04:05)
- Of companies over $5 billion market cap that gained more than 100% in 2025, China led with 81 companies, followed by the U.S. with 43 companies, and South Korea in third place. (07:48)
- The effective U.S. tariff rate increased from 2% to approximately 17%, representing a massive increase that the market largely shrugged off. (37:14)
