US Stocks vs The World
Igor Manukhov - Jul 04, 2025
The US market has been rebounding quicker than other regions. The US dollar remains a major headwind.
US stocks took it on the chin earlier this year. They have done so poorly against its global peers that the investment community started to call for the end of the US stock market dominance that lasted since 2011. The jury is still out on that call, but as I mentioned during the April market selloff, it felt more of a US loss than a world gain. During the sell off, I advised not to rush to rebalance, but to wait and see how various regions and gold will perform relative to the US on the way up.
The results are in. The vertical blue line marks the market bottom in April. The five panels below represent relative performance of the US vs various markets in the following order:
- Black line (top panel) compares US stocks to Canadian stocks (rising line marks US outperformance).
- Red line compares US to EAFE stocks (Europe, Australia, Far East).
- Green line compares US to emerging markets.
- Purple line compares US stocks to gold.
- Pink line compares US stocks in Canadian dollars vs US stocks in US dollars.
As you can see, US stocks have been recovering nicely and gaining ground on various regions and gold. So far it looks like a repeat of the come back US stocks saw in 2023 and 2024 (after a brutal loss of 2022). The only major headwind remains a weak US dollar. That is what the last panel on the chart represents. The US dollar has been a major spoiler of the US stocks come back so far.
