Why are global stocks outperforming the U.S. market?

Global stocks have surged nearly 9% year-to-date, significantly outpacing the S&P 500's 1.41% growth, with some markets like South Korea's KOSPI up 24%.

How does the U.S. dollar's performance affect foreign investors?

The U.S. dollar has declined 10.6% over the past 12 months, reducing the realized gains for foreign investors holding U.S. equities.

Where are investors looking for higher returns?

Investors are increasingly seeking higher returns in Europe and Asia due to a global bull market and to hedge against potential currency losses in the U.S.

Home / Business and Economy / Global Stocks Soar, U.S. Trails Behind

Global Stocks Soar, U.S. Trails Behind

11 Feb

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Summary

Foreign stocks have surged nearly 9% year-to-date, far outpacing U.S. markets.
A 10.6% decline in the U.S. dollar over 12 months impacts foreign investor returns.
Investors seek higher returns overseas amid a global bull market.

Global equity markets are showing robust performance, with international stocks surging nearly 9% year-to-date. This contrasts sharply with the S&P 500's more subdued performance of 1.41% in the same period. South Korea's KOSPI has seen an impressive 24% increase, highlighting significant growth opportunities outside the United States.

The strength of foreign markets is partly attributed to currency dynamics. The U.S. dollar has depreciated by 10.6% against a basket of foreign currencies over the last 12 months. This decline means that foreign investors who profited from U.S. equities may see their gains significantly reduced when converting back to their home currencies.

Analysts suggest that while foreign investment in the U.S. remains strong, investors are actively seeking to hedge against potential currency losses. The ongoing global bull market makes it attractive to explore high-return opportunities in Europe and Asia, where many major stock indices are outperforming U.S. benchmarks. Goldman Sachs has recently raised its forecast for emerging markets, signaling continued optimism for international equities.