The U.S. economy is “nowhere near the end of the storm,” according to Win Thin, head of currency strategy at Brown Brothers Harriman. Speaking to CNBC, Thin said the idea that the U.S. economy is uniquely strong no longer holds true. He explained that earlier pro-growth policies like tax cuts and deregulation have been replaced with new measures like tariffs, deportations, and layoffs tied to the Department of Government Efficiency. These shifts have added a lot of uncertainty to the markets and made investors nervous.
Thin also pointed out that the market is acting unusually. Normally, when there’s economic trouble, the U.S. dollar (UUP) gets stronger, but right now, it is actually getting weaker while Treasury yields are rising, which is not typical. He said that recent Treasury auctions have gone well, but there are growing worries about the U.S. becoming a less attractive place to invest because of unpredictable policy changes. “Markets like certainty, they hate uncertainty,” Thin said.
Interestingly, Thin called the dollar’s recent weakness “cyclical” and “man-made” and blamed it on three months of unpredictable government actions. As a result, he said that it will take time and more stability from Washington in order to rebuild trust with investors. Thin believes the U.S. is just beginning to deal with these challenges and that the usual market signals are no longer behaving as expected.
Is SPY a Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 412 Buys, 84 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $671.82 per share implies 25.2% upside potential.
