This performance phenomenon isn’t just limited to U.S. equities. One of the interesting aspects of last week’s sell-off was that two of Asia’s largest markets- China and Japan – managed to buck the downward trend and finish higher.
Chinese equities benefited from a better-than-expected manufacturing release, while Japanese stocks seem to be responding to share buybacks, which have now reached a six-year high. But more importantly, Japanese stocks and Chinese equities also benefited from their modest valuations, at least compared to equity markets in the U.S. or Europe.
You can read more about why I like large-cap, Japanese and Chinese stocks, and where else I see relative value, in my latest Investment Directions monthly market outlook.
Sources: Bloomberg, BlackRock research
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.