The reason for this is rather straightforward; growth has steadily outperformed value this entire move higher, and given the US' favorable weighting towards growth there's been a sizeable tailwind.
International markets have far more exposure to value sectors, like financials, materials, and industrials compared to the United States.
As such, the growth vs value relationship is a key barometer to watch for the second half of the year.
The ratio has eclipsed its former peaks, which could signal a breakout is on the horizon.
Alternatively, if we see growth have a poor week relative to value, it could signal the beginning stages of a rotation that would favor international markets over the United States.
It's a cliché, but this week will be rather telling for this important dynamic.
