Hi All,
Last week, the market saw positive trends, with the S&P gaining 83 basis points, and Nasdaq remaining stable. The absence of tech in the upward drift was notable. In-line economic data and cautious comments from Fed Chair Powell helped keep interest rates lower, benefiting interest rate-sensitive sectors like Real Estate, which surged over 4.5%. Attention is now on November's employment reports. The market is in "soft landing mode," and in-line reports are likely to sustain this sentiment.
For this week, I have attached an article detailing the concentration in international stock returns compared to domestic returns. In 2023, the remarkable performance of the top seven U.S. tech stocks has dominated S&P 500 returns, prompting concerns about market concentration. However, international developed markets, reflected in the MSCI EAFE Index, show a more balanced performance with the top 10 companies up 13.7% and others up 6.7%. This broader success is attributed to a diversified sector composition, better-quality returns from earnings growth and dividends in the Eurozone and Japan, and improved profitability across sectors in Europe. The outlook for international markets is optimistic, driven by discounted valuations, favorable currency dynamics, improving fundamentals, higher nominal growth, rising interest rates benefitting value sectors, and a focus on returning capital to shareholders.
https://am.jpmorgan.com/us/en/...
I hope you enjoy this piece, and please reach out to me if you have any questions.