O'Hanley: 'Sell America' Trade Not Showing Up in Numbers

Summary

Ron O'Hanley, State Street CEO, says the 'Sell America' trade is not yet showing up in positioning or flows despite discussions. He remains constructive on the US economy and asset allocation, noting investors are overweight US assets and equity allocations are at multi-year highs. He also discusses the upcoming Fed leadership change, arguing institutional safeguards limit its long-term impact, and says private credit concerns are overblown while credit fundamentals remain strong.

• O'Hanley says geopolitical events have raised uncertainty but usually have short-lived market effects.
• He sees no evidence in the numbers of a renewed 'Sell America' trade; investors remain overweight US assets.
• US economic tailwinds include fiscal stimulus, known tariffs, dollar depreciation, and World Cup spending.
• He expects a Fed leadership change to have less long-term impact due to institutional safeguards.
• Private credit stress concerns are viewed as overblown and not systemic.
• Compressed credit spreads signal a strong credit environment but require careful underwriting.
• State Street is servicing private credit firms and has partnered with Apollo on a private credit ETF.