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Feb 17
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LONG
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Ben Carlson
Director of Institutional Asset Management, Ritholtz Wealth Management
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"We are looking at the worst start to the year for US stocks versus MSCI World since 1995... European stocks, Pacific stocks... are just smoking the S&P." A combination of a potentially weakening dollar, "Sell America" sentiment due to political/AI risks, and attractive valuations abroad is driving capital overseas. The momentum is now self-reinforcing as these markets hit multi-year highs. LONG International Equities (Developed and Emerging) to chase the momentum and valuation gap. A sudden strengthening of the US Dollar or global geopolitical instability. |
The Compound News
“Unrealized” Capital Gains Tax is Economic Su...
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Feb 17
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LONG
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Dan
Morgan Stanley Analyst
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The speaker explicitly states, "Stick with the international trade... whereas the AI centric optimism has now ceded to concern, that's obviously benefiting international." He also cites "policy and fiscal tailwinds helping Japan, helping Latin America." As the "AI trade" in the US becomes crowded and faces skepticism (disruption fears), capital is rotating into undervalued markets. Europe and Japan offer a "valuation discount" combined with new fiscal catalysts that were previously absent, making them the primary beneficiaries of the US tech pause. LONG International markets as the momentum baton passes from US Tech to global value/cyclicals. Global recession or a resurgence of US exceptionalism driving the dollar higher. |
Bloomberg Markets
Tech Stocks Dip as AI Doubts Linger on Wall S...
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Feb 16
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LONG
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Sebastien Page
CIO & Head of Global Multi-Asset, T. Rowe Price
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T. Rowe Price is "barbelling" exposure. They note US Small Caps need rate cuts to perform, and they see a breakdown in correlation where Asia/Non-US markets are outperforming due to better valuations. With the US market concentrated and facing "AI Scare" volatility, capital is seeking diversification. Non-US Value and Small Caps (if the Fed cuts rates as implied by the "risk-off" bond bid) offer the best risk/reward for rotation. LONG Small Caps and International Value as a diversification play against US Tech concentration. Fed keeps rates higher for longer; global growth slows. |
Bloomberg Markets
AI 'Scare Trade' Takes Hold; Talabat FY Earni...
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Feb 06
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LONG
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Richard Bernstein
CEO and Chief Investment Officer at Richard Bernstein Advisors
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Bernstein argues that while US earnings growth is leveling off, profit cycles outside the US are actually accelerating. Investors are currently overpaying for US growth. He posits a simple choice: If you can buy 20% growth for 40x earnings (in the US) or 20% growth for 20x earnings (International), the cheaper option is mathematically superior. Additionally, US investors are severely underweight in this asset class (holding <10% allocation in a sector that represents 35-40% of the global market). Non-US markets offer accelerating earnings cycles compared to the US plateau. A strengthening US Dollar could act as a headwind, though Bernstein believes the Fed cutting rates into strong GDP will likely weaken the dollar, boosting foreign returns. |
CNBC
Market broadening is very healthy, says Richa...
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