While headlines may have focused on the S&P 500 reaching all-time highs yesterday, the US was not alone in doing so. On the same day, 3 other of the 23 major countries that we track in our Global Macro Dashboard also reached all-time highs: Canada’s S&P/TSX Composite, Russia’s MICEX, and Switzerland’s SMI. In our Global Macro Dashboard each week we provide a look at these countries’ major indices in local currency over the past year and ten years in addition to other information on their economies. While the S&P has reached these highs, it has the fifth highest valuation of the 23 countries with a P/E of 19.23x. But this also comes with generally better than average data points for the broader economy as the US boasts the fifth highest GDP growth on a year-over-year basis.
Canada’s S&P/TSX Composite index has a fairly similar chart to the S&P 500 over the past year. Like the US, our northern neighbor’s stock market sold off hard in the final quarter of 2018, bottoming very late in the year to surge in 2019. Whereas the US saw some hiccups near Q4 2018 highs, the S&P/TSX has been straight up with a new high yesterday. Of those sitting at all-time highs, Canada has one of the more reasonable valuations at 18.74, though it is still above the world average. At just over 3% the country’s dividend yield is also better than the US, though economic growth is a bit slower with GDP and Retail Sales growth nearly half that of the US. Industrial production is also about 1% YoY worse.
Moving to Europe, Switzerland’s Stock Market Index (SMI) has also been on a solid run this year up to all-time highs. The country’s economic picture is a bit mixed as it has below average GDP growth, one of the lowest inflation rates, and is one of four countries with declining retail sales growth. But at the same time, Industrial Production growth YoY is the second highest of the 23 countries and the unemployment rate is also one of the lowest.
Even though it made a new high this week, Russia’s MICEX is the cheapest valued stock market index of the 23 countries we track with a P/E at an astoundingly low 5.2. At the same time, the dividend yield is 5.51%, the highest of these countries.
While they did not reach all-time highs yesterday, two other BRIC countries, Brazil and India, are worth noting as they too recently came up to highs. Brazil’s IBOVESPA closed at all-time high a bit further back in mid-March and has yet to make a strong push back up to there. But the country’s market has held its own hovering around the 50-DMA. The index is now looking to move back above the 50-DMA. On a longer term chart, the index has been on a tear since the country came out of a recession in 2016. India’s SENSEX has also been on a solid rally since 2016 despite a pullback in the late summer/fall of 2018. While the index has fallen over the past week, on the 16th, it closed at its highest level ever. India is also the highest growth country in our dashboard, and as a result, also has a very elevated valuation at 28.72. Start a two-week free trial to Bespoke Institutional to access our Global Macro Dashboard and much more.