"Investors are 'selling America' in spades Tuesday: The 10-year Treasury yield is at its highest point since August, the U.S. dollar slid, and the traditional safe-haven metal investments-gold and silver-surged once again to record highs."
"The catalyst for the selloff was fresh escalation from U.S. President Donald Trump, who has threatened a 10% tariff on eight European allies-including Germany, France, and the UK-unless they cede to his demands to acquire Greenland. Trump also threatened a 200% tariff on French wines and champagnes to pressure French President Emmanuel Macron to get on his Nobel Peace board."
"But if investors keep getting caught up in the volatility of day-to-day politics, and shun the U.S., they'll miss the forest for the trees, Ermotti argued. While admitting the current environment is "bumpy," he pointed to a statistic: Last year alone, the U.S. created 25 million new millionaires. For a wealth manager like UBS, that is 1,000 new millionaires a day. To shun that level of innovation in U.S. equities for gold would be a reactionary move that ignores the long-term innovation of the U.S. economy."
U.S. financial markets moved sharply risk-off, with the 10-year Treasury yield rising to August levels, the dollar weakening, and gold and silver hitting record highs. The selloff followed tariff threats from the U.S. President against multiple European allies and steep duties on French goods, increasing political volatility. UBS views diversifying away from the U.S. as impractical given U.S. economic strength, innovation, and rapid wealth creation, noting 25 million new millionaires last year. UBS expects continued growth in wealth and market share and cautions against abandoning long-term U.S. equity innovation for precious metals.
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