Who is Winning
Igor Manukhov - May 09, 2025
The US is leading the recovery, but less convincingly than before – potentially signaling a shift in market leadership.
Since the market bottomed on April 7th, most of assets have been recovering. Despite almost universal expectations that the US will continue to outperform, the S&P500 is having a tough year so far. In fact, US stocks have underperformed Canadian and International stocks.
Back in March, I noted that US underperformance during downturns is nothing new – we saw that back in 2022. However, once the market rebounded, US quickly resumed its winning ways. Considering this experience, I suggested giving US stocks the benefit of the doubt and monitor their performance during the recovery on a relative basis. The table below shows results that we have so far: while U.S. stocks have risen more than other regions since the April bottom, the margin is narrower than in past recoveries.
We will have to see how the rest of the year shapes out, but given the evidence, we must allow for the possibility that the US might not dominate going forward after 15 years of outperformance.
Any major asset allocation change should be based on fact, but it is important to remain open-minded. I find that charts are very good in pointing out possible winds of change.
| Asset Name | Performance since Apr 7th, 2025 (current market bottom) |
| S&P500 (US stocks) | +15.44% |
| TSX (Canadian Stocks) | +13.70% |
| EAFE stocks (Europe, Australia, Far East) | 14.81% |
| Emerging Market stocks | 11.19% |
| Gold | +11.16% |