Central banks in the US, Europe, and Japan all raised their policy rates over the last two weeks. Bond yields are rising nearly everywhere. Neither development has broken the global stock bull market, as earnings forecasts keep getting marked up.
The Stay Home and Go Global investment strategies have been tracking each other fairly closely in recent months, with limited dispersion between the two. The divergence instead has been across individual markets.
Here's more:
I. Stay Home vs Go Global
The ratios of the US MSCI to the All Country World (ACW) ex-US MSCI in dollars and in local currencies remain on downtrends relative to their early-2025 highs (charts). However, they have been relatively flat so far this year.
The major stock market index performances show the same. The US MSCI is up 11.7% ytd in dollars versus 12.9% for the ACW ex-US MSCI (chart).
Among country MSCIs, Brazil leads the mtd rankings at 3.6% in dollar terms, with Taiwan at 2.8% and South Korea at 1.0% (chart). The US is down 0.5%, ahead of the ACW ex-US at -2.0%. Germany and Switzerland trail at -6.0% and -5.0%.
II. Earnings & Valuation
