U.S. stocks soar above global markets, giving investors solid path for growth
U.S. markets are far outpacing their global counterparts in 2024, continuing a decade-long trend of strong growth compared with the rest of the world
NEW YORK — U.S. markets are far outpacing their global counterparts in 2024, continuing a decade-long trend of strong growth compared with the rest of the world.
The S&P 500 is up 10% for the year, compared to just 4% for developed markets outside the U.S. Since 2019 the S&P has gained 48%, compared to just 10% for other developed markets, according to the MSCI, a benchmark of global stocks.
Since 2004, the S&P 500 has nearly quadrupled, while the MSCI is up 48%.
Faster earnings per share growth is the main driver of the trend: Earnings for the S&P 500 are up nearly 47 times that of the broader global market over the last 17 years, according to Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
Earnings growth overall for companies in the S&P 500 is expected to jump 11% in 2024, following nearly 2% growth in 2023 and 4.5% growth in 2022. Strong consumer spending and a solid jobs market have been fueling the U.S. economy, despite stubbornly high inflation and high interest rates making it more difficult to borrow money.
The U.S. economy has historically been far more consumer-driven than counterparts in Europe and Asia, helping to fuel steady earnings growth for U.S. companies over a longer period of time. Stock buybacks have also steadily increased over the last few decades, which tends to inflate earnings. Also, big tech companies typically dominate the movement of the S&P 500 and their profits have skewed growth for the benchmark index.
“The bottom line is investors pay for earnings growth and developed markets (outside the U.S.) haven't
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