US markets started 2023 higher, but a number of global markets have left us in the dust. Select foreign stocks and funds have posted double-digit or high-single-digit gains at the beginning of the year. Here are a few of the world’s leaders.
The US dollar peaked in September and has fallen significantly since then. The rapid deterioration rivals the plunge in the three months following the peak of the pandemic in March 2020. According to DataTrek Research, this pattern could drive a further decline, which is expected to happen in 2023.
The weakened greenback has encouraged global investors to look elsewhere for growth. Some global markets have already had big runs, which could be unsustainable, so investors should beware.
The S&P 500 is up just 2.5% year-to-date, while the Dow Jones Industrial Average has posted a minuscule 0.6% gain. The knocked down Nasdaq composite leads the pack so far, up 4.9%.
Let’s see how these numbers compare to the rest of the world.
Global Markets: Mexico Up Double Digits
Mexico leads global market indices, with Mexico’s S&P/BMV IPC up 9.8% year-to-date. The iShares MSCI Mexico ETF (EWW) performed even better, rising 13.8%.
Mexican airport developer Grupo Aeroportuario (ASR) is up more than 18%, with reported passenger travel up 23% from 2019. Tourism is an important sector for the Mexican economy.
The German DAX is up 9% and the iShares MSCI Germany ETF (EWG) is up 12.3% year-to-date.
Germany’s GDP increased by 1.9% in 2022, up 0.7% from 2019, despite high energy prices, the war in Ukraine, inflation and other headwinds. Ruth Brand, president of the Federal Statistical Office, noted that “while these difficult conditions persist, the German economy as a whole managed to perform well in 2022.”
Inflation has shown recent signs of slowing down in European countries, including Germany and France. The French CAC 40 is up 9.4% in January, while the iShares MSCI France ETF (EWQ) gained 10.1%.
Chinese equities strong at reopening
China’s Hang Seng HSI is up 9.6% as global markets benefit from the country’s reopening.
The iShares MSCI China ETF (FXI) is up 10.3% Tencent Holdings (TCEHY), the largest holding, up more than 13%. Online retailer alibaba (BABA) is the second largest, up a whopping 29% year-to-date. Internet search company Baidu (BIDU) is up 10%.
Asia continues to impress, with the Korean KOSPI index up 5.9%, while iShares MSCI Korea ETF (EWY) is up nearly 9%, led by Samsung.
Finally, an honorable mention goes to the Australian ASX 200 index, which has gained 5% so far this year.
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