Foreign-Oriented TSX Companies Outperform by a Wide Margin
By Benjamin Tal
US equity bulls have very little patience for those who continue to point to the flaws in the American economy. Mention the fragile housing market, the stubbornly high unemployment rate, the aggressive deleveraging by consumers and the taxing impact of costlier gasoline and you will get little of their attention. After all, with close to 50% of S&P 500 sales generated outside the US, and most of the recent improvement in earnings coming from these companies, why worry too much about the domestic economy if you can rely on everthriving foreign markets? While short-term volatility can challenge and alter this trend at times, the likelihood is that the decoupling of the US economy and its stock market will continue, and even accelerate in the coming years.
