Summary
Looking at the global stock market, the U.S. has been the place to be for years, if not decades. It’s very rare to hear an analyst recommending markets in Canada, Europe, Japan, China, Asia, Russia, South America, Latin America, etc., when all the alpha is available in the U.S. While we have seen some nice absolute returns in overseas equity markets, relative strength has remained in the U.S. Indeed, the S&P 500 has consistently outperformed the emerging markets ETF (EEM) since (drum roll please) 2010. But the EEM has caught our attention, as there now is some possibility of a trend change — this as the peak in S&P 500 relative strength versus the EEM occurred in January 2025. While there have been some past periods of EEM outperformance, they were without any longer-term staying power. So perspective is always needed when undertaking this type of analysis, as EEM soared from April 2003 until October 2007 by an incredible 430%, destroying the almost-100% rally in the S&P 500. The parabolic EEM move stole a lot of future returns, as the ETF was at the same level in February 2024 as it was at its 2007 peak. The EEM really started popping after its April 2025 closing low at $37.60, s
