“There are many names and titles we could use to describe 2020, whether we’re talking about the stock market, the economy, politics, sports, and just about everything else. Certainly for the stock market, we could label it, “The Great Dichotomy” or the “The Great Chasm.”
“In our sector and individual stock pieces, we have illustrated the great divide between the haves and the have-nots. Some sectors have made huge gains in 2020 while some have gotten their faces ripped off. Some individual stocks have soared while others have been thrown on the garbage heap. While we do not have historical data to back these assertions up, after being in the business a few decades, we get the sense that the dispersion of returns this year among many indices, sectors, ETF’s, and individual stocks is quite wide. Well, can the same thing be said about global stock markets? I think we all know the answer already. The benchmark S&P 500 is up 6% in 2020, with the Nasdaq and NASDAQ 100 up 27% and 32% respectfully. China ETF’s are all over the place with the largest, the iShares MSCI China ETF (MCHI), up 18% and the second largest, iShares China Large-Cap (FXI), off 1.5%. Taiwan (EWT) has gained 12%, helped by its 23% Taiwan Semiconductor (TSM) weighting. Sweden (EWD) is up 10% and South Korea (EWY) has risen 8%. On the flip side, Brazil (EWZ) has gotten pummeled, down 40% YTD. EWZ is heavily weighted toward financials and energy, certainly not the place to be so far this year. Austria (EWO) has lost 26%, and is 46% financials and 14% energy. Thailand (THD) is off 24% and is heavily weighted toward financials and energy. Mexico (EWW) is down 23%, United Kingdom (EWU) is 23% lower, while Spain (EWP) has lost 21%. Momentum, relative strength, sector, industry, and stock selection still rules!”
