International Stocks Attractive if Dollar Weakens, Though Upside May Take Time
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International equity market valuations remain at a significant discount compared to the US. This gap could drive returns if the dollar weakens.
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S&P 500 forward earnings estimates have declined slightly but remain strong, with 11-12% EPS growth expected in 2024.
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Q3 '23 earnings "beat rate" is a healthy 7% so far. Q4 '23 earnings estimates have fallen 3.5%.
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In 2019 the Fed cut rates despite flat S&P 500 EPS growth. The S&P 500 still rose 31% that year. Liquidity may trump EPS.
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Non-US markets tend to be more regulated and taxed. Upside could be swift but opportunity may take time to develop.