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Nov 04 2022

Research Preview: Returns In A Year Of Dollar Strength

  • Nov 4, 2022

The U.S. Dollar Index (DXY) has gained 16.2% YTD, its best performance in almost 40 years. However, a strong dollar is bad for those with international investments, as returns are slashed when translated back into dollars. 

Dec 07 2021

Our Annual Lament On Foreign Equities

  • Dec 7, 2021

There should be a name for the syndrome suffered by foreign stock investors over the last decade or so. “Groundhog Day” doesn’t quite cut it, because that event repeats only once a year. It seems like this time of year we always feature a chart showing a healthy YTD double-digit gain in the S&P 500, along with a bond-like gain in EAFE, and a bond-like gain or loss in the MSCI Emerging Markets Index.

Apr 08 2021

EAFE And EM: Long Past Their “Peaks?”

  • Apr 8, 2021

We applied the “Peak Cash Flow” valuation methodology to the EAFE and MSCI Emerging Markets Index and found them both priced at only about one-half of today’s MSCI U.S. multiple. However, the ratios are already above anything achieved during the 2009-2020 global bull market.

Sep 05 2020

Foreign Stocks Party Like It’s The “2010s”

  • Sep 5, 2020

The most likely catalysts for improved relative performance of foreign stocks would be: (1) a bear market; (2) a recession; and, (3) a major downturn in the U.S. dollar. This year has supplied all three, yet the relative strength ratios of most foreign equity composites continue to grind lower as if it’s “business as usual.”

Feb 06 2020

A Storied Bubble’s Pearl Anniversary

  • Feb 6, 2020

The decade of the teens has given way to the decade of the twenties and “year in review” retrospectives are in the books, but as the calendar’s last digit rolls from 9 to 0 we consider one more anniversary worth remembering.

Apr 05 2019

Bottom-Spotting In Foreign Stocks

  • Apr 5, 2019

The tale of two markets has existed for years, but now it’s getting ridiculous.

Jan 18 2019

Sizing Up The Rally

  • Jan 18, 2019

There’s an old saying that bear market rallies look better than the real thing, yet the upswing off December lows looks even better than the typical bear market rally.

Jul 07 2018

Foreign Stocks “De-Coupling”

  • Jul 7, 2018

Market action has been broader and better than we expected given monetary conditions, and Small Cap strength seems to lend credence to contention that rates aren’t yet high enough to bite.

Apr 06 2018

The Foreign Stock Conundrum

  • Apr 6, 2018

A good rule of thumb for thematic and sector investors is that stock market leadership rarely repeats itself in consecutive cycles.

Mar 15 2018

Foreign Stocks: What Will Turn The Tide?

  • Mar 15, 2018

After a brief respite last year, EAFE has reverted to its old form by falling 300 basis points behind the S&P 500 so far in 2018. EAFE’s main transgression might simply be that it represents good relative value in a market that’s been rewarding only momentum...

Jul 28 2017

Foreign Equity Leadership?

  • Jul 28, 2017

Is it too late to tilt a portfolio toward foreign stocks?

Dec 07 2016

America’s Already First...

  • Dec 7, 2016

Thanks to the U.S. dollar’s recent spike, foreign equities in dollar terms declined during November while the U.S. markets were celebrating a Trump victory. Thirty-nine of the 49 MSCI country indexes are in bear market territory from the perspective of a dollar-based investor.

Mar 08 2016

Foreign Stocks Set For A New “Bear”-ing?

  • Mar 8, 2016

Based on comparative valuations alone, one could have made a case for investing in foreign stocks over domestic ones as early as 2010—when EAFE’s valuations sunk to an historical low, relative to the S&P 500. Today, that gap remains extreme.

Jul 08 2015

A Kind Word For “Forward Earnings”

  • Jul 8, 2015

Our criticism of the widespread trust in “forward earnings” has sometimes been harsh, but consider the following: the latest 12-month forward EPS estimate for the EAFE index is $122.71, virtually matching the forward estimate that was made in January 2006.

Feb 07 2014

Polar Vortex Hits The Markets Too

  • Feb 7, 2014

The stock market kicked off 2014 with a (so far) shallow bout of weakness which we don’t consider to be the start of a new cyclical bear market or even a deep correction.

Jan 08 2014

Buy The Bridesmaid, Not The One Looking To Rebound

  • Jan 8, 2014

The investment leadership of a given year has historically had better-than-even odds of outperforming in the following year at both the asset class and equity sector levels.

Feb 05 2012

Looking Deeper Into The Tails Of Distribution

  • Feb 5, 2012

Leuthold’s Eric Weigel examines both positive and negative tail risk among asset classes over two time periods… the recent volatile era versus a preceding, not-as-volatile time period.

Feb 04 2009

The U.S. Is Leading The Foreign Markets, But For How Long?

  • Feb 4, 2009

· The U.S. is leading the foreign markets, but for how long?


Sep 03 2008

Small Cap Outperformance: More Questions Than Answers

  • Sep 3, 2008

Small cap out performance so far in 2008 is baffling. Earnings growth has been weak relative to large caps and valuations are still excessive. Interestingly, EAFE Small Cap Index is underperforming, while its U.S. counterparts are doing well.

Jul 04 2008

Small Caps Succumbing

  • Jul 4, 2008

Why have Small Caps been outperforming Large Caps since January?

Jan 05 2008

Small Caps' Stumble Is A Global Affair

  • Jan 5, 2008

Small caps have trailed the S&P 500 performance by 12-15% since peaking out on a relative basis in the spring of 2006. International small caps have broken down even more decisively on a relative basis.

Nov 05 2007

Bad Breadth Is A Global Concern

  • Nov 5, 2007

Bad breadth is a global concern. It may come as a surprise that foreign breadth is actually weaker than U.S. readings.