President Trump’s second term has officially begun. Since winning the election a little over two and a half months ago, the S&P 500 (SPY) has risen 5.42% through today. That’s better than any of the other key country ETFs shown in the snapshot below. For the most part, these country ETFs have largely fallen since the US election with the two largest declines coming out of South Africa (EZA) and Brazil (EWZ). More broadly, emerging markets like these have significantly underperformed with an average decline of 8% versus only 1% for developed market countries.  While most country ETFs have fallen since early November, in addition to the US, there are only four that are up on the year: Germany (EWG), Singapore (EWS), Canada (EWC), and France (EWQ).  Canada’s gains may come as somewhat of a surprise as the newly inaugurated administration has put the country at the center of tariff talks alongside the neighbor to the south, Mexico (EWW). We provided commentary on these topics in today’s Morning Lineup. While EWC has risen, Mexico has been much weaker with a 6.5% decline since the election. Furthermore, Mexico (EWW) is currently the country ETF that’s the farthest below its 52-week highs and closest to 52-week lows (3.71% away) of the ones shown.

In the chart below, we show the relative strength lines of the country ETFs for Mexico (EWW) and Canada (EWC) versus the United States (SPY).  As shown, the two ETFs have seen relative performance drop since the election as tariff tensions have become more of a reality, but that weakness is in the context of longer-term underperformance that has been persistent throughout the past year.

Welcome to Bespoke Brunch Reads — a linkfest of some of our favorite articles over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

Lighting Roselle: On January 19th, 1883, Thomas Edison introduced the first electric lighting system using overhead wires in the small town of Roselle, New Jersey. Edison had already etched his name in history books for his invention of the incandescent bulb. Still, he sought to demonstrate that his direct current electricity system could reliably provide light to an entire community. So, with the help of his team, Edison installed a network of overhead wires connected to a centralized power station, connecting electricity to homes, businesses, and even the local church in Roselle. The town’s street lamps were revamped from the dim gas and kerosene lighting of the time. Roselle became a model for other towns and cities to follow. It also set the stage for competition between Edison’s direct current system and Nikola Tesla’s alternating current system.

Health & Wellness

The U.S. government runs on Celsius. Just ask anyone on Capitol Hill. (Washington Post)
Celsius energy drinks have become Capitol Hill’s fuel, powering reporters, staffers, and even lawmakers through long hours of legislation and brinkmanship. Loved for its sleek cans, bold flavors, and hefty caffeine punch, Celsius has taken over vending machines and office fridges. Some Congress members even keeping secret stashes. While it’s marketed as a “healthier” alternative to traditional energy drinks, its growing cult status among Hill insiders feels like the perfect chaotic pairing for the high-stakes world of US politics. [Link]

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Last weekend’s Barron’s had an article citing the fascinating results of a study from Arizona State professor Hendrik Bessembinder. In a recent paper, Bessembinder studied the performance of more than 29,000 stocks from 1925 through 2023 and found that most stocks lost money over time and that a small number of stocks are responsible for the majority of the market’s long-term gains. Looking back at stocks with a minimum of 20 years of returns, the study found that Nvidia (NVDA) had the greatest annualized compound return, which should surprise no one. Looking further back, though, of the stocks that have been around since 1925, the three with the biggest gains were Altria (MO), Vulcan Materials (VMC), and Kansas City Southern (KSU).  All three have generated annualized gains of over 14% (table below is from the paper). When you think of the market’s biggest winners over the last 100 years, would you have ever guessed the trio would include a tobacco company, an asphalt company, and a railroad?

It’s hard to imagine a sector of the economy that has been more out of favor in recent decades than tobacco. Given its addictive nature and how popular it was for most of the last 100 years, though, Altria’s strength makes more sense. When it comes to Vulcan (VMC), it doesn’t get less sexy than asphalt. Still, as the auto industry exploded over the last century, especially after WWII, and more Americans moved out of cities and into suburbs, none of it would have been possible without a company like Vulcan laying pavement. Just as networking companies have facilitated the movement of data around the internet since the late 1990s, companies like Vulcan and even Kansas City Southern can, in some ways be thought of as the networking companies of the physical economy of the 20th century.

When the same study is conducted in 2125 looking at the best-performing stocks since 2025, will NVDA be as exciting as a tobacco or asphalt company is now?  If not, which companies of today will end up as the leaders of the next century?