U.S. stocks are lagging international equities over the past year, an unusual occurrence within a longer-term stretch where the S&P 500 index has trounced the rest of the world, according to DataTrek Research.
Non-U.S. stocks have returned an aggregate 10% on a price basis since 2010, according to the DataTrek note. But U.S. stocks had far stronger performance over the same period, with the S&P 500 returning 269% while the Russell 2000 gained 162%, the note says. The U.S. equities market has “a heavy and increasing dose of Big Tech” stocks that have been “outsized winners” since 2010, while also benefiting from the dollar DXY as the world’s reserve currency and “American companies’ relentless focus on profitability,” according to DataTrek.
“As for American business’ profits-first mentality, if anything it has grown stronger in the last year or two,” Colas said. And “we do not see an alternative reserve currency springing up any time soon.”