BREAKINGVIEWS-The Week in Breakingviews: Exceptional no more

By Peter Thal Larsen

LONDON, Sept 28 (Reuters Breakingviews) - Welcome to the first edition of The Week in Breakingviews! For the past few years, I’ve been writing a regular roundup for the global team. Several people encouraged me to offer it to a wider audience, so I’m very excited to start sharing these reflections with you. Please email me with any suggestions. And if you’re not already a Breakingviews subscriber, sign up for a free trial here.

OPENING LINE

“The ouroboros – a dragon eating its own tail, signifying eternal recurrence – is as apt a symbol for the modern mysticism of artificial intelligence as it was for ancient Egypt.”

Read more here: Nvidia adds $100 bln to AI’s load-bearing startup.

FIVE THINGS I LEARNED FROM BREAKINGVIEWS THIS WEEK:

1. The number of employees of Tata Consultancy Services TCS.NS on H-1B visas has halved since 2021.

2. Companies valued at more than 10 times sales account for a record 35% of the value of the S&P 500 Index.

3. Stablecoin operator Tether paid dividends of $7.4 billion in the first half of 2025, almost as much as JPMorgan JPM.N.

4. One in 25 UK citizens by the end of 2024 had arrived after Britain introduced a new points-based immigration system.

5. Japanese prime ministerial hopeful Sanae Takaichi wants the finance ministry to present a plan to double the country’s GDP in 10 years.

EXCEPTIONAL AMERICANISM

At the end of last year, one phrase kept cropping up in my conversations with professional money managers: “American exceptionalism”. U.S. markets had produced superior performance for so long that they had sucked in capital from around the planet. American equities accounted for 67% of the MSCI All-Country World Index. Giant companies like Nvidia NVDA.O were worth more than many countries’ entire stock markets. How long could this continue?

Since Donald Trump returned to the White House in January, investors have had plenty of opportunities to rethink. Just consider what the president has said and done in the past week alone. His administration upended immigration rules by chaotically slapping a $100,000 fee on new applications for H-1B visas, the main method for American companies to lure talented workers from around the world. He has cancelled renewable energy projects, telling the United Nations that “they don’t work”.

Trump’s tariff war on U.S. trading partners continues: branded pharmaceuticals, heavy trucks and kitchen cabinets are the latest product categories to face import levies. He has sent the U.S. Department of Justice after his enemies, filing criminal charges against former FBI Director James Comey. And the president is exerting his authority over private companies. On Thursday he blessed a deal to transfer 80% of TikTok’s U.S. assets from its Chinese owner ByteDance to a new consortium at a supposed valuation of $14 billion, far below most estimates of the short video app’s worth. If that figure is accurate, the transaction would amount to state-enabled expropriation on a scale rarely seen outside Vladimir Putin’s Russia.

Judging by financial markets, however, little has changed. After a brief dip in April when Trump launched his trade war, all three main U.S. stock market indices have risen to all-time highs. American equities still account for 65% of the global benchmark, even though a decline in the dollar has lifted the relative value of non-U.S. stocks. The U.S. dollar remains the dominant currency for global trade and payments.

These two trends strike me as incompatible. Lower taxes, deregulation, and the ongoing artificial intelligence boom may pump up corporate earnings for a while. Yet a country which is at best indifferent – and at times downright hostile – to companies and workers from overseas may struggle to attract capital on the same scale as in the past. Promises of loans and loan guarantees extracted from Japan and South Korea in return for lower tariffs may help, as Trump adviser-turned-Fed Governor Stephen Miran argued this week. Eventually, however, investors may be forced to conclude that a country with an increasingly volatile and unpredictable government deserves a less exceptional rating.

CHART OF THE WEEK

Javier Milei has won many admirers since he became president of Argentina in 2023. Yet while the libertarian economist has balanced the government’s books and calmed inflation, the country’s international position remains precarious. Argentina is still not attracting enough foreign capital to service its foreign-currency debt. No wonder Milei is seeking support from the Trump administration.

THE WEEK IN PODCASTS

Who would want to run a big global car company? Already grappling with the transition from combustion engines to battery-powered vehicles, executives must now steer around Donald Trump’s tariffs. On The Big View this week, Nissan Motor 7201.T CFO Jérémie Papin told our Asia autos columnist Katrina Hamlin how things look from the Japanese carmaker’s boardroom.

The Trump administration’s $100,000 fee for hiring skilled foreign workers sent panic through tech giants like Microsoft MSFT.O, while upending hiring policies at companies from JPMorgan to India’s Tata Consultancy Services. Aimee Donnellan and Jonathan Guilford invited Una Galani and Rob Cyran on to the Viewsroom to debate the fallout and explain how the policy clashes with other U.S. economic aims.

PARTING SHOT

There’s a long-established principle in global debt markets that governments can borrow at cheaper rates than companies. Yet the gap has narrowed and, in some cases, inverted. Among French companies with investment-grade credit ratings, 7% can borrow for less than the sovereign. As governments in the developed world grapple with high debt levels and large companies like Microsoft sit on vast cash piles, expect to see the credit markets get more freakish.

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