If you’ve had a good year so far in the stock market, chances are you had a pretty bad day in the market today.  On the surface, today’s action wasn’t awful.  The S&P 500 (SPY) was down 0.5% while the Russell 1,000 was down 0.7%.  Within the Russell 1,000, the average stock was down even less at -0.33%.

So what’s the big deal?  Well, what made today noteworthy was the near-perfect performance distribution based on how stocks had performed so far this year heading into today.  In the chart below, we’ve broken up the Russell 1,000 into deciles (10 groups of 100 stocks each) based on YTD stock performance through last Friday.  Decile 1 contains the 100 best-performing stocks YTD, decile 2 contains the next best 100, and so on until you get to decile 10, which contains the year’s bottom 10% of performers.  In the chart, we show the average performance today of the stocks in each decile.  As shown, the decile of the best-performing stocks YTD through last Friday was down 2.9% today, while the decile of the worst-performing stocks YTD was up 2%!  As you work your way down from the best decile to the worst, today’s performance gets better and better.

At the very top end of the YTD performance spectrum are the 26 stocks in the Russell 1,000 that entered today up more than 100% on the year.  As shown below, these stocks fell more than 5% on average today, and every single one was down!

On the flip side are the 25 worst-performing stocks YTD coming into today.  These 25 stocks were down an average of more than 50% on the year through last Friday, but they averaged a gain of more than 3% today!

Rarely do we see such uniform performance in one direction based on prior performance in the opposite direction, but that’s exactly what we saw today.  Investors were selling winners and buying losers to quite an extreme degree.

Given this type of action, we wouldn’t make any rash long-term investment decisions based on one day’s moves. Sometimes it’s just opposite day in the market where we see downside mean reversion from winners and upside mean reversion from losers.

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Below is a look at year-to-date total returns for 46 country ETFs available to investors on US exchanges.  While the US (SPY) is sitting on a huge gain of 28.6% this year, the average year-to-date change for these country ETFs is just 8.7%, while the median is even lower at 5.8%. Keep in mind that returns also take into account any movements in the dollar.

Before we get to the biggest winners, nine country ETFs are in the red for the year.  France (EWQ) is the most notable and the only G7 country that’s down in 2024.  South Korea (EWY), Mexico (EWW), and Brazil (EWZ) have been the biggest losers with declines of 17%+.  Brazil (EWZ) has gotten smoked with a decline of 24.3%.  It’s bad enough to see a drop of 20%+, but it’s especially bad when the average country is up 8.7% and the US is up nearly 30%.

On to the positives…other than France, the other six G7 country ETFs are all up more than 10% on the year.  Behind the US, Canada (EWC) has been the second-best of this group with a gain of 18%.

Interestingly, China (MCHI) and the US (SPY) are up nearly the exact same amount this year at just over 28%.  Peru (EPU) ranks as the third best just ahead of SPY with a gain of 31.6%.  Israel (EIS) has been the second best with a YTD gain of 34.5%.  And finally, the best country ETF this year by a significant margin has been Argentina (ARGT) with a gain of 66%.  US investors have so far given Argentine President Javier Milei two thumbs up…way up!

Below we highlight the price change (not total return) of country ETFs going all the way back to the COVID-Crash low on 3/23/20.  While China (MCHI) is up about as much as the US (SPY) in 2024, it’s the only country ETF that’s in the red since the COVID lows.

On the flip side, Argentina (ARGT) once again crushes every other country ETF with a massive 491% gain.  Behind Argentina is Greece (GREK) with a gain of 173.5%, followed closely by the US (SPY) and India (INDA), which have essentially seen the same price change of 171% since 3/23/20.

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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.

Day of Infamy: Franklin D. Roosevelt’s “Day of Infamy” speech, delivered on December 8th, 1941, remains one of the most iconic addresses in American history. In this brief but powerful message to Congress and the nation, Roosevelt condemned the surprise attack on Pearl Harbor by Japanese forces, which occurred just the day before. The attack claimed over 2,400 American lives, destroyed much of the US Pacific Fleet, and shattered the country’s sense of security. The attack forced a nation long committed to neutrality into a global conflict that would redefine its role on the world stage.

Roosevelt outlined Japan’s surprise assault, describing it as a deliberate and unprovoked act of aggression. His measured but resolute words stirred emotions across the country, uniting a grieving and outraged public. Shortly after his speech, Congress voted nearly unanimously to declare war on Japan, signaling America’s official entry into WWII. The impact of the decision was immediate and profound. Factories mobilized for wartime production, men and women enlisted in droves, and communities rallied behind the war effort. The attack on Pearl Harbor had awakened a “sleeping giant,” as many described it.

Media

Art Cashin, New York Stock Exchange fixture for decades, dies at age 83 (CNBC)
Art Cashin, a Wall Street legend and UBS director of floor operations at the NYSE, has passed away at 83. Known for his storytelling, wit, and deep market insights, Cashin was a fixture on CNBC and a respected voice across the financial world for over 25 years. Beyond his market expertise, he was a community builder, whether through his iconic “Friends of Fermentation” gatherings or his efforts chairing the NYSE Fallen Heroes Fund after 9/11. Cashin embodied the spirit of the trading floor with his handwritten notes, rumpled suits, and timeless wisdom. [Link]

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