Jefferies analyst anticipates further downturn in US stock market

Christopher Wood from Jefferies Financial Group Inc. believes that the US stock market is far from its peak and that investors should brace themselves for further declines in stocks, Treasuries, and the dollar.

The analyst pointed out that the market capitalization of US securities as a share of the MSCI All Country World Index reached a record high in late December. However, the dollar has recently entered a long-term weakening phase. Wood predicts that this will result in a decrease in the US stock market cap relative to the global one.

He recommends that investors consider incorporating European, Indian, and Chinese assets into their portfolios. Wood's pessimistic outlook on US markets aligns with a growing global skepticism regarding American exceptionalism, as well as worries about the repercussions of Trump's tariff policies.

In the meantime, Bloomberg reports that the S&P 500 has narrowly dodged entering a bear market. The index has recovered from its monthly lows, but its 8.6% slide year-to-date places it behind European and Chinese indices.