Looking back over the last 50 trading days, we can see this story continue to play out. In the table below, we show the percent of companies in each country outperforming the MSCI World index. Across the entire developed world only 46% of companies have outperformed over the last 50 days, while 69% of US companies have outperformed. The numbers are similar over the previous 20 days, encompassing last month's sell-off and rebound.
Percent of Companies Outperforming the MSCI World Index by Country
In the emerging markets, the trends are comparatively worse. Here only 29% of companies have outperformed the MSCI World index over the last 50 days, while only 23% have outperformed over the last 20 days. The trends are getting worse for the EMs.
Percent of Companies Outperforming the MSCI World Index by Country
From a sector standpoint, the more defensive sectors like health care and utilities have seen the greatest breadth of outperformance. Sixty-seven percent of health care and utility companies have outperformed over the last 50 days. The trends are mostly the same in the emerging markets as can been in the second table.
Percent of Companies Outperforming the MSCI World Index by Sector in Developed World
Percent of Companies Outperforming the MSCI World Index by Sector in Emerging World
Over the last month:
1) The USD has continued to rise.
2) There has been NO change in leadership off the bounce.
3) The market has narrowed more.
All these signs suggest that investors should continue to focus on North American counter-cyclical companies. There is no rotation yet, and as long as the USD continues to rise, we should expect a continued narrowing of market performance.
