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De-dollarization is real, and advisors need a plan

In 2025, U.S. markets remain stable, but America’s financial dominance—and the dollar’s strength—are increasingly in question. At Schwab IMPACT 2025, advisors focused heavily on global diversification, driven not just by market forces but by geopolitical tensions and uncertainty from President Trump’s tariff policies.

Ed Lopez of VanEck said advisors are especially interested in private markets, AI-related opportunities, emerging markets, and de-dollarization. De-dollarization has accelerated as countries diversify away from the U.S. after geopolitical shocks like Russia’s invasion of Ukraine and the U.S. blocking nations from the SWIFT system. As a result, central banks are stockpiling gold, and investors are looking more at gold, emerging-market assets, and even Bitcoin.

Lopez argued that emerging-market bonds deserve renewed attention: many EM countries now have stronger fundamentals—lower deficits and more disciplined central banks—than developed economies. ETFs that can invest in both hard- and local-currency EM debt may offer better flexibility and value.

He also highlighted rising interest in private markets, warning investors that traditional public funds may not offer the best way to access them due to illiquidity. VanEck instead created more liquid access points like their alternative asset managers ETF.

Other themes included the need for careful ETF selection—especially sector ETFs that cap tech exposure—and the role of active management in fast-moving areas like crypto. Read More.

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Morning Bid: Giving thanks for bad economic news.

Weaker-than-expected U.S. economic data (soft retail sales, falling consumer confidence, and a higher 4.4% unemployment rate) has boosted expectations of a Federal Reserve rate cut in December, lifting U.S. and global stocks ahead of Thanksgiving. Fed funds futures now price in about an 80% chance of a 25 bps cut.

In the UK, Finance Minister Rachel Reeves is unveiling a crucial autumn budget expected to include significant tax hikes to stay within fiscal rules and reassure bond markets; sterling is steady after several days of gains.

Elsewhere, the yen briefly strengthened on reports the Bank of Japan may hike rates as soon as next month, while oil prices remain rangebound amid expectations of a supply glut and possible progress on a U.S.-backed Ukraine-Russia peace framework.

Market-wise, a highlight is rising AI-chip competition: Alphabet’s shares rose on news Meta may use Google’s AI chips, while Nvidia fell over 2%, underscoring shifting dynamics in the AI hardware race. Read More.