As risks of a global slowdown have broadly mounted, we have highlighted the standout performance of the US relative to the rest of the world. As we show in our Global Macro Dashboard published this morning, including the United States, there are only five nations with positive relative strength versus the MSCI World Index: India, Norway, South Korea, Taiwan, and the United States.
Of these countries, Norway has outperformed the rest of the world by the greatest margin (43.1%) for some time. Like many country indices, the OBX index saw a large pullback in the final half of 2018 but has rebounded since, even exiting its downtrend. Even through those late year declines, the country’s relative strength has barely faltered continuing its climb as it has much of the past few years.
Behind the US, India has been the third best performer, but that is only a recent development. The relative strength of the SENSEX fell off a cliff in the late summer following significant declines in the index but since bottoming in early October—a time when most other countries were still declining—relative strength has been back on the rise. As it currently stands, India is the most rapidly growing country of our dashboard with a GDP at 7.1% YoY. This comes with a cost, though, as this emerging market also has the highest P/E ratio of 24.32 and the lowest dividend of all the economies we track in our dashboard.
South Korea and Taiwan are the only other two countries whose major stock indices are currently outperforming the MSCI World Index. South Korea’s KOSPI was actually underperforming not long ago. Likewise, Taiwan’s TWSE’s relative strength fell through 2018 but has rebounded considerably. Both of these countries are attractive with valuations below average at 10.19 for South Korea and 12.59 in Taiwan.