Episode summary
“Sell America?” Careful there. | Barron's Streetwise
Barron's Streetwise
· · Hosts: Jack Bary, Andrew Bary · Guests: Lori Calvasina
Summary
Lori Calvasina argues that the much-talked-about “sell America” trade is usually better understood as a geographical diversification trade, not a wholesale rejection of US stocks. In her view, many global investors are simply asking whether they should be as overweight the US as they have been in the past, especially after a strong run in US equities and renewed concern about expensive valuations and the dominance of the MAG 7 and AI leaders.
She said RBC’s year-ahead work still points to a resilient US backdrop, with strong GDP and earnings growth, but also flags the possibility that investors rotate some new money toward Europe and other developed markets. Calvasina noted that Europe screened closer to average on valuations than many clients assumed, while US and other developed markets looked more elevated. She also argued that if investors are truly rotating from growth to value, that logic points more constructively toward Europe on a relative basis.
On policy and geopolitics, Calvasina said markets often wait before pricing in risk, pointing to past geopolitical shocks and the 2025 tariff episode as examples. She laid out a framework for market drawdowns, from routine pullbacks to major crises, and said the 2025 tariff selloff fit a “growth scare” pattern that recovered unusually fast. Even so, she said bank earnings still suggest a very resilient economy underneath the surface.
Key takeaways
- Calvasina said “sell America” usually means trimming US overweight positions, not abandoning US equities entirely.
- RBC’s year-ahead outlook still assumes strong US GDP and earnings growth, even with headwinds and valuation concerns.
- Calvasina said Europe looked closer to average on valuations than many investors believed, making it a relative diversification candidate.
- She argued that a rotation from growth to value in the US should, by historical pattern, make Europe more attractive versus the US.
- Calvasina said the 2025 tariff episode behaved like a fast-recovering growth scare, not a full-scale recession or crisis.
Notable quotes
“I think it can also be a question right of shifting allocations”
“there can be some very literal interpretations, right, of selling my US stock, selling, you know, other asset classes”
“people perhaps should have been thinking a little bit more about diversifying into Europe”
“sometimes markets just take a wait and see approach”
How the episode opens
We talked about sort of where could things go wrong, headwinds, tailwinds, risks, wild cards, you know, those sorts of issues and one of them was the Cell America trade.
Hello and welcome to the Baron Streetwise podcast. I'm Jack How and the voice you just heard is Lorie Calvacina. She's the head of US equity strategy at the Royal Bank of Canada and she's talking with us about well investy stuff as you might imagine.
What to make of the stock market going forward in 2026 but also this phrase I keep hearing the sell America trade. What's that all about? That's coming up.
Listening in is our audio producer Alexis Moore. Hi, Alexis.
Hey, Jack. — This is, of course, Davos week. It's the World Economic Forum in Davos, Switzerland. And no, I'm just kidding, folks. That's total rage bait. That That's meant to just get everyone on the edge of their seats with veins bulging from their necks, saying, "You idiot. It's Davos." Yes, I know it's Davos.
Be careful. The listeners already took issue with you saying Mario Kart. — What? What? That's wrong. Mario Kart. How are you supposed to say it? I say Mario Kart.
Oh, Mario. That's the That's the bigger offense. So, this is a short week for me because we had the holiday and I've got to hit the road and do some reporting this week.
I know what you're thinking, Jack. You write the Streetwise column. It's two facts, four jokes, and you're out the door.
No, it's more to it than that. Sometimes I do actual reporting. So, I'll be on the go this week.
And so, we're recording this before President Trump is scheduled to speak at Davos. And I wanted to touch on this phrase I keep hearing and it's the sell America trade.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us stocks outlook
- market sentiment
- rates and inflation
- equity strategy
- selloff risk
Companies and tickers mentioned
- RY
- Royal Bank of Canada
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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