For the past two years the U.S. market has crushed the rest of the globe! The U.S. (S&P 500) is up 42% compared to 15% for Developed Non-U.S. (Europe, Asia, Australia) and -3.5% for the Emerging Markets (China, Brazil, India, etc.). While no one knows when the rest of the globe will catch or even pass the U.S. the returns year to date are interesting. Below is a chart highlighting the returns of the global markets.
As far as the global PE ratios go, here is a brief list. This list highlights the opportunities from a price perspective. While we remain cautious of some areas of the globe, there’s no doubt that there are some great potential opportunities beyond the U.S.
- United States – 20.3
- China – 10.1
- Japan – 16.6
- India – 19.1
- Europe – 18.7
The Good Ole’ U.S. of A.
According to historical probabilities the Consumer Discretionary and Industrials sector have the highest probability of making giving investors the best returns during the November to April time frame. (To learn more about this historical probability cycle click here). The snapshot below highlights how those sectors along with the rest of the U.S. sectors are performing.
A few bullet points of note:
- Consumer Discretionary is the top performer as we expected. We will maintain our overweight status on this sector.
- Industrials is lagging the S&P 500 mainly due to the hit in the oil sector. A lot of these industrial companies rely upon the energy sector for business. With oil being pummeled this has drawn on that sector as well.
- Healthcare and Staples (the typically more defensive names) are outperforming in large part due to January’s volatility.
Please note that this is not intended to be a recommendation to buy or sale any security. For more information please email Brett Pattison at firstname.lastname@example.org