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For the first time in five years, all the major economies seem to be growing in sync (Chart 1). This upturn in global growth is a function of further credit extension in China, a recovering manufacturing base in Europe and Japan and a rebound in the commodity complex, particularly oil. Considering there were several times last year when a contraction in credit was pressuring the largest contributor to world GDP growth (China), the mere survival of the Eurozone was being debated and oil was prepping for a prolonged downturn - this growth spurt came as a surprising, albeit welcome, sign. While US economic growth has been stable throughout this upturn, the international recovery has helped foreign stocks outperform their domestic brethren to start the year. There are many risks associated with international investing; in fact, the catalysts that initiated the latest growth spurt, such as OPEC’s supply agreement, may indeed prove temporary. However, as allocators of our clients’ capital, we must ask, is the recent international outperformance sustainable? Is this the year that international stocks will finally outperform domestic stocks? We look through the lens of our technical, fundamental and macro disciplines to formulate our thoughts; so far, we like what we are seeing. It’s early for sure, but recent trends are encouraging. Regardless of one’s views on international investing, investors around the globe have a dizzying array of factors to consider - last quarter was certainly no exception. As always, it is important not to confuse short-term volatility with long-term trend. Click the button below for our review of Q1 2017 and outlook going forward.

Q1 2017 Market Insights

Doug Couden
Doug Couden
CHIEF INVESTMENT OFFICER & PARTNER

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