Evan Simonoff

The investing storylines are changing.

ARRATIVES PLAY SUCH AN IMPORTANT ROLE IN INvesting that Nobel laureate Robert Shiller once devoted an entire book to the subject. The danger, however, in crafting investment themes is that they fit so perfectly into a narrative that accuracy becomes a casualty.

All the recent discussion of American exceptionalism and non-exceptionalism may be a case in point. If Europe enjoys something of an economic renaissance in the second half of this decade, many investors think they may well owe some thanks to U. S. President Donald Trump.

Entering this year, the most popular storyline was that valuations of giant U. S. technology companies were stretched and that equity markets would need to broaden out if the bull market were to be sustained. But now some participants think an inflection point is at hand and it will be foreign markets providing the leadership.

That’ s what happened in the first half of 2025, as many European equity markets displayed surprising strength. The president’ s mercurial pronouncements on tariffs and defense policy prompted nations on the continent to ditch their complacency and embrace more assertive economic programs.

Country indexes in Germany, Poland and Spain all exceeded 15 % through June 23— Poland was Europe’ s top market— while the S & P 500 inched up only 2.4 %.“ Markets go in long cycles, but the U. S. is closer to the top than the rest of the world,” says Richard Gall, a director and investment specialist at Baillie Gifford.

Overlaying the global narrative is the AI story. Some, like Vanguard’ s chief global economist and head of asset allo-

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