It was a vintage performance. President Trump skewered the edifice of globalization yesterday at World Economic Forum in Davos, Switzerland. Lest anyone miss the message, he claimed that “The United States is keeping the whole world afloat” and that the status quo would no longer endure.
US Commerce Secretary Howard Lutnick put a finer point on the President’s view, telling the Davos crowd: globalization is a “failed policy” that’s inflicted a high price on the US. “And what we are here to say is that ‘America First’ is a different model—one we encourage other countries to consider.”
Globalization may be on the defensive – some might say in its death throes — but from an investing perspective it’s thriving. Global stocks are still outperforming US shares so far in 2026, extending last year’s winning run. Using a set of ETFs through yesterday’s close (Jan. 21), all the major equity regions of the world are maintaining a healthy lead over the US.
Topping the list by a wide margin so far this year: stocks in , which have surged more than 11% so far in 2026.
Global equities ex-US are ahead 4.2% year to date — that’s a solid lead over , which are still trailing the rest of the world via a thin 0.5% increase.
These are still early days for assessing the economic and investment implications of a US that’s redefining and reinventing its role on the world stage. But to the extent that markets are offering early clues on expectations, the results imply that the sentiment continues to favor international diversification. It would be ironic if, at some future point in time, analysts look back and identify Donald Trump as the catalyst that revived the fortune of global investing strategies.
Presuming that will be the case is premature. But it’s somewhat more plausible at the moment, given the strong run in offshore stocks last year that’s spilling over into 2026.
A key question for the year ahead, and beyond: Is a secular shift unfolding in global markets? A pair of analysts at Breakout Capital, writing last week for the CFA Institute’s blog, advise that an attitude adjustment appears to be in progress.
We believe we are in a new regime where there will be an increased recognition that international markets are on the mend and offer strong earnings growth and policy improvement at much cheaper valuations.
The strong cyclical advantages that the US offered 15 years ago are increasingly being chipped away creating the conditions for a multi-year tailwind in favor of international markets.
That’s still a speculative view, albeit one that continues to resonate so far in 2026.
This much is clear: the old world order is breaking down. What replaces it is still up for grabs. Regime shift for markets and macro is always messy and full of surprises, along with ample opportunities. The average global investor suspects that the clues of what’s coming are beginning to emerge.