By the end of 2022, stock and bond investors alike were ready to put a dismal calendar year in the rear-view mirror. Thankfully, the fourth quarter showed markets advancing once again—setting a more hopeful tone going into the New Year. This was especially true for investors in international equities, as the magnitude of Q4 outperformance (a nearly 10% advantage for MSCI EAFE vs. the S&P 500) gave the asset class its first calendar year “win” relative to U.S. indices since 2017. Foreign currencies regained some of their strength against the dollar, thanks to easing U.S. inflation and less hawkish expectations for the Fed. European markets led on the upside, and with the energy outlook improving considerably the regional positioning was increased from underweight to near neutral. The recession question looms large in 2023, but even though the U.S. economy may hold up better than some in Europe and elsewhere, we believe that deeply discounted valuations and an attractive sector mix make a case for international equities’ continued outperformance.
Recent Insights
Why July’s consumer slowdown may be misleading – Morning Macro with Dave
July retail sales disappointed investors, but calendar shifts, auto sales comparisons, and other one-time factors suggest consumer demand remains relatively stable.
August 26, 2026
Business Wire, “Bailard names Simon Smundak, CFA, as SVP, Private Markets & Solutions, deepening its UHNW advisory bench”
Bailard names Simon Smundak, CFA, as Senior Vice President, Private Markets & Solutions, deepening its UHNW advisory bench.
August 26, 2026
Quarterly International Equity Strategy Q2 2026
Q2 saw a sharp risk-on rally as easing Middle East tensions and renewed AI-buildout conviction reversed Q1's energy shock, with non-U.S. markets—especially hardware- and semiconductor-heavy economies—leading the rebound. Given the speed of thd reversal and July's renewed volatility for both geopolitics and AI sentiment, we continue to favor staying diversified rather than tied to one theme, country, or style, while still expecting non-U.S. equities to lead over a multi-year horizon due to broad participation, attractive valuations, and structural tailwinds.
August 7, 2026
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