🔎 Monitoring Rotation Out of the U.S.

We start every week with a top down look at what international markets are doing for a broad perspective.

For 18 months we've pointed to the growing performance of international markets. For the last decade, international exposure has been a non-starter for American investors given the magnitude of outperformance from domestic equities.

But more recently, international markets are finally showing up with many individual countries breaking all time highs after many years of sideways action.

We're closely monitoring the ratio between International Stocks Ex-US $VEU relative to the S&P 500 $SPY. When this line moves higher, as it has done since January 2025 it means American stocks are underperforming their global alternatives.

This year, the ratio has worked lower. But longer-term over many years, we could be in the early stages of a trend reversal in this ratio.

We're closely monitoring this ratio for a sign on whether money is fleeing the U.S. or rotating back in.

A major story we're paying attention to that could have consequences for this dynamic is infrastructure expenditure in the United States. We're seeing significant capex from hyperscalers which is pulling money into U.S. markets.

But another infrastructure project also on the horizon is the U.S. government plan to build out a Golden Dome for national defence. This would require trillions of dollars of investment, which could help fuel rotation back into American companies.

This week, the entire Stock Market Media analyst team is covering the scope of this opportunity in a free five-part mini series.

You can sign up for this by clicking here.