Trump’s Davos Disruption: Is Globalization’s Decline fueling a New Investment Era?
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The global economic order is undergoing a dramatic reassessment, with reverberations felt in financial markets worldwide.
President Trump delivered a pointed critique of globalization at the World Economic Forum in Davos, Switzerland, on January 21, 2026, asserting that “The united States is keeping the whole world afloat” and signaling a definitive break from the status quo.This sentiment was reinforced by a senior US Commerce Secretary, who characterized globalization as a “failed policy” that has come at a significant cost to the United States, advocating for an “America First” approach as a viable alternative.
While globalization may appear to be on the defensive, even facing what some describe as its “death throes,” a surprising trend is emerging: global stocks are currently outperforming their US counterparts. Through yesterday’s market close, major equity regions across the globe have maintained a lead over US shares, extending a winning streak from the previous year.
Latin America Leads the Charge in Global Equity Gains
Leading the charge is Latin America, with stocks surging more than 11% year-to-date in 2026. Globally, equities excluding the US are up 4.2% so far this year, a substantial margin ahead of the 0.5% increase seen in US stocks.
These early market signals suggest a growing appetite for international diversification. One analyst noted the potential irony of Donald Trump inadvertently catalyzing a revival in global investing strategies. While it’s premature to declare a definitive shift, the strong performance of offshore stocks last year, continuing into 2026, lends credence to this possibility.
A Secular Shift in Global Markets?
The question now is whether this represents a temporary fluctuation or the beginning of a more profound, secular shift in global markets. Analysts at Breakout Capital, writing for the CFA Institute’s blog last week, suggest that an “attitude adjustment” is underway.
They believe a new regime is emerging,characterized by increased recognition of the improving fundamentals in international markets – specifically,strong earnings growth,policy improvements,and more attractive valuations. The cyclical advantages the US enjoyed 15 years ago are diminishing, potentially creating a multi-year tailwind for international investments.
This view remains speculative, but it is gaining traction as 2026 unfolds.It’s clear that the established world order is fracturing, and the shape of what comes next remains uncertain. Regime shifts are inherently disruptive, but also present significant opportunities for astute investors. The average global investor increasingly senses that clues about the future are beginning to surface.
The implications of a redefined US role on the world stage are still unfolding, but early market signals suggest a growing preference for international diversification. The old world order is breaking down, and what replaces it is still up for grabs.
Why: president Trump’s criticism of globalization at the 2026 World Economic Forum in Davos, Switzerland, and the subsequent “America First” policy pronouncements, sparked a reassessment of the global economic order. This,coupled with improving fundamentals in international markets,is driving a shift in investor sentiment.
Who: Key players include President Trump, a senior US Commerce Secretary, analysts at Breakout Capital, and global investors.
What: A potential shift is occurring in global investment strategies, with international stocks outperforming US stocks. This is fueled by a perceived decline in the benefits of globalization for the US and improving economic conditions in other regions, particularly Latin America.
How did it end?: The article doesn’t describe an end to this shift, but rather presents it as an unfolding situation. The situation is still
