Daily Spotlight: Global Stocks Still Offer Value

As worldwide markets are challenged amid a backdrop of higher interest rates and ongoing conflict in the Middle East and Ukraine, one thing has not changed. U.S. stocks are more expensive than global stocks. And that's the case even with the market-leading returns from global stocks in 2025-2026. Consider P/E ratios. The trailing P/E ratio on the S&P 500 is 27, above the global average of 19 and well above the 12-13 average P/Es for emerging markets stocks in China and Latin America. A review of yields tells a similar story. The current dividend yield for the S&P 500 is 1.0%, versus the global average of 2.3% and European and Latin American yields of 3%-4%. Taking a step back, reasons that investors generally are willing to pay a higher price for North American securities include the transparency of the U.S. financial system as well as the liquidity of U.S. markets. What is more, global returns can be volatile across individual countries, given currency, security, political, and geopolitical risks. Indeed, U.S. stocks (ETF SPY) have outperformed EAFE (ETF EFA) over the past five years. The tide turned a bit in 2025, as investors responded to the uncertainty over U.S. trade policy and as global central banks lowered rates. Last year, foreign stocks were up

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