{"id":"3336ff2df0bc06864ecd8eeb6852487d8b9de4a5802096288cda4e6f80de1624","title":"Matteo Crosignani, Lina Han, and Marco Macchiavelli argue in Liberty Street Economics that supply chains expose U.S. portfolios to geoeconomic risk","argument":"Published October 1, 2026, Matteo Crosignani, Lina Han, and Marco Macchiavelli describe geoeconomic risk as valuation losses when countries use economic, trade, or financial leverage for geopolitical aims. They argue that U.S. stocks can carry this risk through overseas customers and global supply chains, even when investors hold only domestic stocks. Using U.S. export controls targeting Chinese firms, they trace effects through connected U.S. suppliers and the mutual funds holding those suppliers. The authors report that suppliers’ stock prices fall after control announcements and that funds with greater exposure experience lower returns and higher volatility. Active managers sell affected suppliers and other China-linked firms. The authors suggest this broader selling reflects managers learning about supply-chain risks that may not have been fully priced or understood. They also report that active funds’ performance declines less, while their later portfolios become more concentrated and tilt toward “lottery-like” stocks. Their conclusion is that domestic diversification may not fully reduce risk when firms share global exposures; investors need to understand where portfolio companies earn revenue and how policy shocks could affect those relationships. The post’s views are the authors’ and do not necessarily reflect the position of the Federal Reserve Bank of New York or the ","topicIds":["investment-booms-and-busts"],"domain":"other","claimType":"attributed reading","limits":"Text as retrieved on October 30, 2026; originally published October 1, 2026. The analysis focuses on export controls and U.S. domestic equity mutual funds; its findings do not establish how other investors or policy shocks are affected. The authors describe the post as based on their recent Staff Report. The post states that its views are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System.","speaker":{"name":"Federal Reserve Bank of New York","roleAtSource":"Publisher"},"source":{"title":"Navigating Geoeconomic Risk in the U.S. Stock Market","publisher":"Federal Reserve Bank of New York","format":"Article","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","publishedAt":"2026-10-01T11:00:00.000Z","dateBasis":"Date supplied by the publisher’s feed."},"evidence":[{"text":"Crosignani, Han, and Macchiavelli argue that global supply-chain links expose domestic U.S. stocks and portfolios to geoeconomic risk.","excerpt":"domestic U.S. stocks expose investors to substantial geoeconomic risk through firms’ global supply-chain relationships","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"},{"text":"The authors report that U.S. suppliers’ stock prices fall after export controls target Chinese customers.","excerpt":"U.S. suppliers experience a cumulative abnormal stock return of −3.6 percent right after the announcement","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"},{"text":"The authors report that active managers sell affected suppliers and other China-linked firms, and interpret this as a response to risks that may not have been fully understood or priced.","excerpt":"This broader selling suggests that investors learn that geoeconomic risk may be embedded in complex supply-chain links that were not fully priced or understood before the shock.","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"},{"text":"The authors conclude that domestic-stock diversification may not fully mitigate risk when firms share global exposures.","excerpt":"Diversification across domestic stocks may not fully mitigate this risk when many firms share similar global exposures.","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"}],"sourceMedia":{"status":"unchecked","sourceUrl":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","checkedAt":null,"items":[]},"assumptions":[],"openQuestion":{"attribution":"Open question","text":"How well do the reported patterns in U.S. mutual funds and export-control events capture geoeconomic risk across other investors, firms, and policy shocks?"},"whatWouldChangeView":{"attribution":"Change condition not recorded","text":""},"editorialComparisons":[],"live":{"title":"Matteo Crosignani, Lina Han, and Marco Macchiavelli argue in Liberty Street Economics that supply chains expose U.S. portfolios to geoeconomic risk","summary":"Published October 1, 2026, Matteo Crosignani, Lina Han, and Marco Macchiavelli describe geoeconomic risk as valuation losses when countries use economic, trade, or financial leverage for geopolitical aims. They argue that U.S. stocks can carry this risk through overseas customers and global supply chains, even when investors hold only domestic stocks. Using U.S. export controls targeting Chinese firms, they trace effects through connected U.S. suppliers and the mutual funds holding those suppliers. The authors report that suppliers’ stock prices fall after control announcements and that funds with greater exposure experience lower returns and higher volatility. Active managers sell affected suppliers and other China-linked firms. The authors suggest this broader selling reflects managers learning about supply-chain risks that may not have been fully priced or understood. They also report that active funds’ performance declines less, while their later portfolios become more concentrated and tilt toward “lottery-like” stocks. Their conclusion is that domestic diversification may not fully reduce risk when firms share global exposures; investors need to understand where portfolio companies earn revenue and how policy shocks could affect those relationships. The post’s views are the authors’ and do not necessarily reflect the position of the Federal Reserve Bank of New York or the ","question":"How well do the reported patterns in U.S. mutual funds and export-control events capture geoeconomic risk across other investors, firms, and policy shocks?","claims":[{"text":"Crosignani, Han, and Macchiavelli argue that global supply-chain links expose domestic U.S. stocks and portfolios to geoeconomic risk.","excerpt":"domestic U.S. stocks expose investors to substantial geoeconomic risk through firms’ global supply-chain relationships","support":"source-stated"},{"text":"The authors report that U.S. suppliers’ stock prices fall after export controls target Chinese customers.","excerpt":"U.S. suppliers experience a cumulative abnormal stock return of −3.6 percent right after the announcement","support":"source-stated"},{"text":"The authors report that active managers sell affected suppliers and other China-linked firms, and interpret this as a response to risks that may not have been fully understood or priced.","excerpt":"This broader selling suggests that investors learn that geoeconomic risk may be embedded in complex supply-chain links that were not fully priced or understood before the shock.","support":"source-stated"},{"text":"The authors conclude that domestic-stock diversification may not fully mitigate risk when firms share global exposures.","excerpt":"Diversification across domestic stocks may not fully mitigate this risk when many firms share similar global exposures.","support":"source-stated"}],"limitations":["Text as retrieved on October 30, 2026; originally published October 1, 2026.","The analysis focuses on export controls and U.S. domestic equity mutual funds; its findings do not establish how other investors or policy shocks are affected. The authors describe the post as based on their recent Staff Report.","The post states that its views are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System."],"mediaId":null,"correctionReason":null,"id":"3336ff2df0bc06864ecd8eeb6852487d8b9de4a5802096288cda4e6f80de1624","publicationId":"03078835-29c0-1266-245c-9b4e8793b4a1","version":1,"sourceUrl":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","sourceTitle":"Navigating Geoeconomic Risk in the U.S. Stock Market","publisher":"Federal Reserve Bank of New York","publishedAt":"2026-10-01T11:00:00.000Z","originalPublished":{"value":"2026-10-01T11:00:00.000Z","precision":"instant","basis":"backfill:feed_published"},"firstObservedAt":"2026-10-30T03:50:05.406Z","createdAt":"2026-11-05T08:33:24.663Z","historical":true,"entityIds":[],"topicIds":["investment-booms-and-busts"],"media":[],"sourceMedia":{"status":"unchecked","sourceUrl":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","checkedAt":null,"items":[]},"editorialDecision":{"outcome":"accept","mediaId":null,"inputHash":"31dc6bb3e59968749f21b73dbc4b57b6bd32c2e0b5d8883a059b4e83b9ed4fd1","rubricVersion":"em-backfill-context/3","provider":"typesafe","model":"jev-1.13.0","reasonCodes":["bridge_admitted_by_model"],"confidence":0.9,"decidedAt":"2026-10-30T03:50:03.121Z"},"provenance":{"textHash":"014447582b40aae60f045f80b15eda26ffbd212aa481063075580757e08a5c0c","observationId":"344bcc2ea459dfd931d32fbc1c2626392be499b0f6dc4395f80555e42fff4704","retrievedAt":"2026-10-30T03:51:48.473Z","kind":"publisher-page","preparer":{"model":"openai/gpt-6-luna","runId":"6222bc26-e8e4-f73f-11fb-47e780b2446f"},"reviewer":{"model":"anthropic/claude-opus-5.5","runId":"1213c301-b9ef-e3a8-4b23-99ceac58114d"}},"audit":{"status":"uncertain","reviewedAt":"2026-11-05T08:29:46.801Z","model":"anthropic/claude-opus-5.5"}},"canonicalUrl":"https://escapemeridian.com/readings/matteo-crosignani-lina-han-and-marco-macchiavelli-argue-in-3336ff2d","formats":{"html":"/readings/matteo-crosignani-lina-han-and-marco-macchiavelli-argue-in-3336ff2d","markdown":"/readings/matteo-crosignani-lina-han-and-marco-macchiavelli-argue-in-3336ff2d.md","json":"/readings/matteo-crosignani-lina-han-and-marco-macchiavelli-argue-in-3336ff2d.json"},"attribution":"Headline and summary by Escape Meridian, prepared by Luna from the attributed source. A source check is not independent confirmation of the source’s claims.","maintainedGuideLinks":[],"readerContext":{"version":"reader-context-v1","attribution":"Reference context selected by Escape Meridian; separate from source evidence. Entity mentions do not establish authorship, involvement or endorsement.","terms":[{"id":"term-export-controls","name":"Export controls","explanation":"Government rules that limit which goods and technologies can be sold abroad, and to whom.","referenceUrl":"https://en.wikipedia.org/wiki/Export_control"}],"entities":[]},"researchQuestions":[],"withdrawn":false,"references":{"schemaVersion":1,"target":{"type":"reading","id":"3336ff2df0bc06864ecd8eeb6852487d8b9de4a5802096288cda4e6f80de1624","revision":"03078835-29c0-1266-245c-9b4e8793b4a1","revisionKind":"publication-id","title":"Matteo Crosignani, Lina Han, and Marco Macchiavelli argue in Liberty Street Economics that supply chains expose U.S. portfolios to geoeconomic risk","url":"https://escapemeridian.com/readings/matteo-crosignani-lina-han-and-marco-macchiavelli-argue-in-3336ff2d"},"source":{"type":"source","id":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","revision":"014447582b40aae60f045f80b15eda26ffbd212aa481063075580757e08a5c0c","revisionKind":"sha256-source-text","title":"Navigating Geoeconomic Risk in the U.S. Stock Market","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/"},"status":"available","items":[],"next":null,"scope":"Explicit citations in public readings and public file attachments to this reading. Shared topics are not citations. Other artifact types need an explicit reference adapter."},"revisions":[{"id":"3336ff2df0bc06864ecd8eeb6852487d8b9de4a5802096288cda4e6f80de1624","title":"Matteo Crosignani, Lina Han, and Marco Macchiavelli argue in Liberty Street Economics that supply chains expose U.S. portfolios to geoeconomic risk","argument":"Published October 1, 2026, Matteo Crosignani, Lina Han, and Marco Macchiavelli describe geoeconomic risk as valuation losses when countries use economic, trade, or financial leverage for geopolitical aims. They argue that U.S. stocks can carry this risk through overseas customers and global supply chains, even when investors hold only domestic stocks. Using U.S. export controls targeting Chinese firms, they trace effects through connected U.S. suppliers and the mutual funds holding those suppliers. The authors report that suppliers’ stock prices fall after control announcements and that funds with greater exposure experience lower returns and higher volatility. Active managers sell affected suppliers and other China-linked firms. The authors suggest this broader selling reflects managers learning about supply-chain risks that may not have been fully priced or understood. They also report that active funds’ performance declines less, while their later portfolios become more concentrated and tilt toward “lottery-like” stocks. Their conclusion is that domestic diversification may not fully reduce risk when firms share global exposures; investors need to understand where portfolio companies earn revenue and how policy shocks could affect those relationships. The post’s views are the authors’ and do not necessarily reflect the position of the Federal Reserve Bank of New York or the ","topicIds":["investment-booms-and-busts"],"domain":"other","claimType":"attributed reading","limits":"Text as retrieved on October 30, 2026; originally published October 1, 2026. The analysis focuses on export controls and U.S. domestic equity mutual funds; its findings do not establish how other investors or policy shocks are affected. The authors describe the post as based on their recent Staff Report. The post states that its views are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System.","speaker":{"name":"Federal Reserve Bank of New York","roleAtSource":"Publisher"},"source":{"title":"Navigating Geoeconomic Risk in the U.S. Stock Market","publisher":"Federal Reserve Bank of New York","format":"Article","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","publishedAt":"2026-10-01T11:00:00.000Z","dateBasis":"Date supplied by the publisher’s feed."},"evidence":[{"text":"Crosignani, Han, and Macchiavelli argue that global supply-chain links expose domestic U.S. stocks and portfolios to geoeconomic risk.","excerpt":"domestic U.S. stocks expose investors to substantial geoeconomic risk through firms’ global supply-chain relationships","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"},{"text":"The authors report that U.S. suppliers’ stock prices fall after export controls target Chinese customers.","excerpt":"U.S. suppliers experience a cumulative abnormal stock return of −3.6 percent right after the announcement","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"},{"text":"The authors report that active managers sell affected suppliers and other China-linked firms, and interpret this as a response to risks that may not have been fully understood or priced.","excerpt":"This broader selling suggests that investors learn that geoeconomic risk may be embedded in complex supply-chain links that were not fully priced or understood before the shock.","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"},{"text":"The authors conclude that domestic-stock diversification may not fully mitigate risk when firms share global exposures.","excerpt":"Diversification across domestic stocks may not fully mitigate this risk when many firms share similar global exposures.","url":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","relationship":"Source-stated"}],"sourceMedia":{"status":"unchecked","sourceUrl":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","checkedAt":null,"items":[]},"assumptions":[],"openQuestion":{"attribution":"Open question","text":"How well do the reported patterns in U.S. mutual funds and export-control events capture geoeconomic risk across other investors, firms, and policy shocks?"},"whatWouldChangeView":{"attribution":"Change condition not recorded","text":""},"editorialComparisons":[],"live":{"title":"Matteo Crosignani, Lina Han, and Marco Macchiavelli argue in Liberty Street Economics that supply chains expose U.S. portfolios to geoeconomic risk","summary":"Published October 1, 2026, Matteo Crosignani, Lina Han, and Marco Macchiavelli describe geoeconomic risk as valuation losses when countries use economic, trade, or financial leverage for geopolitical aims. They argue that U.S. stocks can carry this risk through overseas customers and global supply chains, even when investors hold only domestic stocks. Using U.S. export controls targeting Chinese firms, they trace effects through connected U.S. suppliers and the mutual funds holding those suppliers. The authors report that suppliers’ stock prices fall after control announcements and that funds with greater exposure experience lower returns and higher volatility. Active managers sell affected suppliers and other China-linked firms. The authors suggest this broader selling reflects managers learning about supply-chain risks that may not have been fully priced or understood. They also report that active funds’ performance declines less, while their later portfolios become more concentrated and tilt toward “lottery-like” stocks. Their conclusion is that domestic diversification may not fully reduce risk when firms share global exposures; investors need to understand where portfolio companies earn revenue and how policy shocks could affect those relationships. The post’s views are the authors’ and do not necessarily reflect the position of the Federal Reserve Bank of New York or the ","question":"How well do the reported patterns in U.S. mutual funds and export-control events capture geoeconomic risk across other investors, firms, and policy shocks?","claims":[{"text":"Crosignani, Han, and Macchiavelli argue that global supply-chain links expose domestic U.S. stocks and portfolios to geoeconomic risk.","excerpt":"domestic U.S. stocks expose investors to substantial geoeconomic risk through firms’ global supply-chain relationships","support":"source-stated"},{"text":"The authors report that U.S. suppliers’ stock prices fall after export controls target Chinese customers.","excerpt":"U.S. suppliers experience a cumulative abnormal stock return of −3.6 percent right after the announcement","support":"source-stated"},{"text":"The authors report that active managers sell affected suppliers and other China-linked firms, and interpret this as a response to risks that may not have been fully understood or priced.","excerpt":"This broader selling suggests that investors learn that geoeconomic risk may be embedded in complex supply-chain links that were not fully priced or understood before the shock.","support":"source-stated"},{"text":"The authors conclude that domestic-stock diversification may not fully mitigate risk when firms share global exposures.","excerpt":"Diversification across domestic stocks may not fully mitigate this risk when many firms share similar global exposures.","support":"source-stated"}],"limitations":["Text as retrieved on October 30, 2026; originally published October 1, 2026.","The analysis focuses on export controls and U.S. domestic equity mutual funds; its findings do not establish how other investors or policy shocks are affected. The authors describe the post as based on their recent Staff Report.","The post states that its views are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System."],"mediaId":null,"correctionReason":null,"id":"3336ff2df0bc06864ecd8eeb6852487d8b9de4a5802096288cda4e6f80de1624","publicationId":"03078835-29c0-1266-245c-9b4e8793b4a1","version":1,"sourceUrl":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","sourceTitle":"Navigating Geoeconomic Risk in the U.S. Stock Market","publisher":"Federal Reserve Bank of New York","publishedAt":"2026-10-01T11:00:00.000Z","originalPublished":{"value":"2026-10-01T11:00:00.000Z","precision":"instant","basis":"backfill:feed_published"},"firstObservedAt":"2026-10-30T03:50:05.406Z","createdAt":"2026-11-05T08:33:24.663Z","historical":true,"entityIds":[],"topicIds":["investment-booms-and-busts"],"media":[],"sourceMedia":{"status":"unchecked","sourceUrl":"https://libertystreeteconomics.newyorkfed.org/2026/10/navigating-geoeconomic-risk-in-the-u-s-stock-market/","checkedAt":null,"items":[]},"editorialDecision":{"outcome":"accept","mediaId":null,"inputHash":"31dc6bb3e59968749f21b73dbc4b57b6bd32c2e0b5d8883a059b4e83b9ed4fd1","rubricVersion":"em-backfill-context/3","provider":"typesafe","model":"jev-1.13.0","reasonCodes":["bridge_admitted_by_model"],"confidence":0.9,"decidedAt":"2026-10-30T03:50:03.121Z"},"provenance":{"textHash":"014447582b40aae60f045f80b15eda26ffbd212aa481063075580757e08a5c0c","observationId":"344bcc2ea459dfd931d32fbc1c2626392be499b0f6dc4395f80555e42fff4704","retrievedAt":"2026-10-30T03:51:48.473Z","kind":"publisher-page","preparer":{"model":"openai/gpt-6-luna","runId":"6222bc26-e8e4-f73f-11fb-47e780b2446f"},"reviewer":{"model":"anthropic/claude-opus-5.5","runId":"1213c301-b9ef-e3a8-4b23-99ceac58114d"}},"audit":{"status":"uncertain","reviewedAt":"2026-11-05T08:29:46.801Z","model":"anthropic/claude-opus-5.5"}}}],"audits":[{"publicationId":"03078835-29c0-1266-245c-9b4e8793b4a1","verdict":"uncertain","findings":[{"dimension":"attribution","status":"pass","explanation":"The reading correctly attributes the post to Matteo Crosignani, Lina Han, and Marco Macchiavelli in Liberty Street Economics, published by the Federal Reserve Bank of New York. It also keeps the authors' disclaimer. This is a single authored post, not a listing.","excerpt":"Matteo Crosignani, Lina Han, and Marco Macchiavelli"},{"dimension":"summary","status":"uncertain","explanation":"The content is faithful and readable. Geoeconomic risk is defined, and export controls are defined in the definitions. However, the summary is cut off mid-sentence (\"...Federal Reserve Bank of New York or the \"), which leaves an incomplete passage for readers. Smallest repair: complete the sentence with \"Federal Reserve System.\" or drop it, since it is already in the limitations. Optionally, it could note the authors' finding that the risk appears priced, with exposed firms earning about 1 percent per month in abnormal returns.","excerpt":"do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System"},{"dimension":"date","status":"pass","explanation":"October 1, 2026 matches the dateline and originalPublished. The dateModified timestamp is from the same day. The related-stories sidebar is not used. Nothing in the reading is framed with hindsight, and this is a publisher page, so no archive disclosure is needed.","excerpt":"October 1, 2026"},{"dimension":"support","status":"pass","explanation":"Each claim is attributed and backed by verbatim excerpts. These cover the supplier price decline, the lower returns and higher volatility for exposed funds, active selling of affected and other China-linked firms, smaller declines for active funds, and the tilt toward concentrated, lottery-like holdings. The scope limitation and the question are appropriately conditional.","excerpt":"exposed active funds subsequently hold more concentrated portfolios and tilt toward “lottery-like” stocks"},{"dimension":"media","status":"pass","explanation":"No media was selected, and no verified media candidates were supplied, so leaving media empty is appropriate.","excerpt":null}],"createdAt":"2026-11-05T08:29:46.801Z","model":"anthropic/claude-opus-5.5"}],"correctionUrl":"https://escapemeridian.com/corrections/"}