U.S. Stocks Lose Out to Emerging Markets by the Most Since 1990
- Earnings forecasts are climbing faster in emerging markets
- Valuation discount remains deep, offering buying opportunity
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Stars may be aligning for an era of outperformance for emerging-market stocks, if the first three weeks of 2022 are any indication.
The MSCI Emerging Markets Index has made the best start to a year since 1990, relative to the S&P 500. Earnings estimates for the index are rising twice as fast as those for the U.S. benchmark. And to top it off, developing-nation shares are still almost 40% cheaper, offering a buying opportunity amid the technology-led stock rout in New York.