Today, the fourth of July, is the 250th anniversary of the founding of the United States of America, and it’s being celebrated with a big birthday bash. It will have the world’s largest fireworks display with a record 850,000 shells being fired in 40 minutes, parades, flypasts, fairs, concerts, balls et al. The official name for the party is the Semiquincentennial, and I can’t wait to hear Donald Trump pronounce it.
The birthday bash underlines that the US is a mere 250 years old, a child compared to Europe and a toddler compared to the Asian civilisations. Indeed, America sometimes comes across as a superpower with the emotional maturity of a teenager on energy drinks. Unfortunately, its testosterone-fuelled adolescent growth pangs are giving the rest of the world a huge headache, from the Middle East fiasco to the tough-talking Godfather act that puts off its friends, to behaving like the school bully. We wrote about the mess it has made in the Middle Easthere.
But there’s also a nerdy side to the teenager, seen most recently in its AI prowess. Ruchir Sharma saysthe AI boom is shaping a new world order. He says, ‘The winners include the US and China, thanks above all to their foundational AI models; Taiwan and South Korea on the strength of chip manufacturers; Japan and Israel on a broad array of AI skills.’ The Bank for International Settlements pointed to theAI boom’s double edge: bigger profits, fewer jobsand warned that theAI boom is moving faster than any technology mania before it. The BIS’s annual economic report also warned that "equity valuations are elevated, particularly for firms at the core of AI development."
Back in India, we’ve always had a soft spot for America, starting from the time when Hyder Ali allied with the French against the British in India. This forced Britain to divert thousands of soldiers, part of its navy and financial resources to India, weakening its forces in the American war of independence. John Adams, the second US president had praised Hyder Ali and the Pennsylvania state navy named one of its warships ‘Hyder Ally’ in his honour.
But the bromance has recently hit a rough patch, with the US sending out an ‘I love you, but what’s in it for me’ note. Trump’s flirtation with General Munir is a classic ploy aimed at a jealous India. The US adventure in West Asia, in particular, cost India dearly,leaving its mark on Delhi’s fiscal arithmetic.
The AI boom has also hit Indian IT companies hard and we looked atthe writing on the wall. The net impact of juggling all these problems—tariffs, catching up on defence spending, geopolitics, AI challenges—is that the Indian markets echo what the Red Queen said to Alice: “It takes all the running you can do, to keep in the same place."
It is also a measure of America's influence that scratch beneath most stories in this newsletter and the US appears somewhere in the footnotes. This week investors worried aboutwhether the bull market can survive, how tointerpret the Fedin Kevin Warsh's 'say less' era, whether AI is creating the next great boom or the next great bubble, whetherPersistent Systems' push into Europe through Nagarrocan reduce its dependence on a slowing US technology market, and whetherIndia's defence companiesare beneficiaries of a world that seems to be growing more dangerous by the day.
For a country celebrating its independence, America has an extraordinary talent for making everyone else dependent on its decisions. AI is an American story before it becomes an Indian one. The Fed's decisions ripple through every emerging market. Global capital still takes its cues from Wall Street. Even India's defence build-up owes something to a world made less stable by Washington's policies. Indian investors checking the health of the domestic economy still find themselves glancing nervously at US bond yields and the strength of the US dollar.
The contradiction is striking. At 250, America remains both the world's leading source of technological breakthroughs and one of its biggest sources of uncertainty. The same country that gave the world ChatGPT, Nvidia and the latest AI revolution also gives it tariff wars, geopolitical shocks and periodic market panics. Like many gifted teenagers, it can be brilliant, disruptive and exhausting in roughly equal measure. To compound the confusion, Trump, an adolescent at 80, seems to have taken Alan Greenspan’s mantra to heart: ‘If I seem unduly clear to you, you must have misunderstood what I said’.
So, here's to America at 250: we may complain about it, yet we continue to organise our portfolios, our policies and sometimes our foreign affairs around whatever it does next.
Happy 250th birthday, America. Please enjoy the fireworks. The rest of us would appreciate it if you could keep them confined to the celebrations.
In case you missed them, here are some of the other stories and insights we published this week, apart from our technical picks in the equity, commodity, and forex markets:
Does the rise of Kirloskar Oil Engine posea threat to Powerica’s stock rally?ABD: Is the premium mix becoming more profitable? Weekly Tactical pick:What makes this hotel stock attractive?June auto sales: Demand momentum maintains speed, IsPersistenta good buy after the steep correction?Sedemac Mechatronics,Page Industries, Deutsche Bank’s Indian retail assets –Another feather in Kotak’s cap?Kaynes Technology,Groww,Zydus Lifesciences, ThisSFB is primed for sustained RoA growthand share price gains,Baazar Style Retail,Shringar House of Mangalsutra
Altman’s AI safety proposal: let us win, or everybody loses
Can Kevin Warsh tame the Fed’s $7tn balance sheet?
IPO frenzy cools, butthis fund is giving investors another way in
Areretail tradersbiting off more than they can chew?
Retail investors pump Rs 35,328 crore into equities in June quarter, most since December 2024
Despite challenges,Indian markets have demonstrated remarkable resilience: JM Financial MF’s Satish Ramanathan
Delhi's EV policysets the tone for India's auto transition
India’s steel output growth is slowing downin Q1
CVs in fast laneas they shrug off global headwinds
CarTrade’s monetisation efforts at OLXare yielding good results
Second-time CEO change amild disruption for Kotak Bank
Health and wellness are boosting growth of thenutraceutical market in India
RBI report showshigh credit score no guarantee forloanquality, but income is
New IIP Data:Manufacturing slows, resilience holds
June GST mop-up— A birthday joy or jitters?
Households are borrowing a lot to just consume. That should worry us
China looms large as India, Japan sit for talks
Risks galore for a wary RBIdespite a resilient Indian economy
Unparalleled at scale,India’s next payments chapter must enshrine trust
WhatsApp may be a win for Kunal Shahbut not so much for India
Themismatch between Startup India and Viksit Bharat
Meet Manas Human, the co-founder who took Nagarro from a Delhi startup to a $1.3 billion global tech company
WhyPersistent CEO Sandeep Kalra calls Nagarro acquisition a 'God-given opportunity'
IT companies revamp employee learning platforms asAI reshapes upskilling
China’s global strategy has met its demand constraint
Can BRICS fuel India’s energy securityambitions?
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