A Great Disturbance in the Market: The Empire Strikes... Elsewhere!

The Force is Weak With This Market

I find your lack of faith in the U.S. market disturbing. But even a Sith Lord must acknowledge the winds of change. Bank of America's latest report indicates investors believe international stocks will outperform U.S. assets over the next five years. Only a pitiful 25% believe the U.S. will continue its dominance. Pathetic. As for bonds? A mere 5%. It seems the Force is strong elsewhere.

A Galaxy Far Far Away... From the S&P 500

This year the iShares MSCI All Country World Index ex U.S. ETF (ACWX) has surged ahead boasting a 15% increase dwarfing the S&P 500's paltry 2.6%. This is the largest outperformance since the fund's inception in 2008. Perhaps these investors sense a disturbance in the Force—a growing imbalance in the global market.

The Dollar's Descent: 'Impressive. Most Impressive.' (Not!)

Positioning in the U.S. dollar has reached lows unseen in over two decades. President Trump's policies particularly those concerning trade have cast a shadow over the dollar's once impenetrable safe haven status. His tariffs briefly halted have sown seeds of doubt and investors have responded with a resounding 'I have a bad feeling about this.'

Gold: The New Hope (For Investors)

With tensions rising in the Middle East and Europe investors are hoarding gold like Wookiees hoarding life debts. According to Hartnett "'long gold' is the most crowded trade for the third month running." The 'long Magnificent 7' streak is over proving that even the mightiest empires can crumble. Remember 'You can't stop the change any more than you can stop the suns from setting.' Unless you have a Starkiller Base.

Emerging Markets: A Rebellion Brewing?

Investors are rotating into emerging markets and global equities. In June the Eurozone emerging markets and banks are favored over U.S. stocks the dollar and energy. These regions sense their chance to strike back against the Empire fueled by undervalued assets and the promise of future dominance. It is their destiny.

Etsy: 'I Find Your Lack of Faith Disturbing,' but Truist Doesn't

Truist has raised its price target on Etsy by 9% suggesting an 11% upside. Despite exposure to the De Minimis exemption being eliminated in China Etsy is believed to be better insulated than competitors like Temu and Shein. Analyst Youssef Squali advises investors to 'buy the dip,' implying that even a Sith Lord can find value in the most unexpected places. Perhaps Etsy can bring balance to the Force...or at least a nicely crafted lightsaber hilt.