U.S. equities set a new high relative to their global peers on Tuesday after the USTR announced it would delay a 10% tariff on some Chinese products and remove others from the tariff list.
The S&P 500 Index’s rally may strengthen the argument that the imposition of tariffs on September first would have negatively effected the U.S. more than the rest of the world.
The continued outperformance of the U.S. also serves as a reminder that the global market is:
- priced at a 78% discount (using P/E) vs. the U.S.
- priced below long term P/E averages
- yields almost 2x the U.S. market
While we firmly believe (and both economic data and markets have shown) the U.S. is healthier than its global peers, we remain constructive on international markets and believe a symbiotic resolution to the Sino-American trade conflict would remove a cloud of uncertainty, lift sentiment, and unclog global supply chains. All of which could lead to a reversion to the long-term mean.
Disclosure: This Commentary represents a review of topics of possible interest to Pennsylvania Trust’s clients and is not personalized investment advice. It contains Pennsylvania Trust’s opinions, which may change following the date of publication. Information obtained from third-party sources is assumed to be reliable but is not guaranteed. No outcome – including performance – is guaranteed, due to various uncertainties and risks. This document is not a recommendation of any particular investment. Investment decisions for clients are made on an individualized basis and may be different from what is expressed here. Past performance is no guarantee of future results.