US stocks have performed well during some periods in the past while their overseas peers have outperformed in other periods. For more than 10 years thru September of 2021, US equities have had an excellent run. However this outperformance may not last forever and foreign stocks may take their lead soon. According to an article at Hartford Funds:

 Since 1975, the outperformance cycle for US versus international stocks has lasted an average of 7.8 years. We’re currently 10.5 years into the current cycle of US outperformance, which suggests the tides may be getting ready to turn.

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The chart shows the values of the S&P 500 Index’s returns minus the MSCI World ex USA Index’s returns. When the line is above 0, domestic stocks outperformed international stocks. When the line is below 0, international stocks outperformed domestic stocks.  

Data Sources: Morningstar and Hartford Funds, 10/21.

Past performance does not guarantee future results. The performance shown above is index performance and is not representative of any Hartford Fund’s performance. Indices are unmanaged and not available for direct investment. 

US equity is represented by the S&P 500 Index; International equity is represented by the MSCI World ex USA Index. Please see below for representative index definitions. For illustrative purposes only.

Source: US and international equities have traded periods of outperformance,  Hartford Funds

Technology stocks are off to rough start this year. The tech-heavy NASDAQ Composite Index is down 4.8% so far this year. The S&P 500 on the other hand is off only 2.2%. Since late last year many technology stocks are in a downward trend. The market breadth is also not good for NASDAQ. For example, last Friday 690 stocks reached their 52-week lows compared to 84 for 52-week highs on the NASDAQ according to WSJ market data.

Many large-cap stocks trading on the exchange have declined 20% or more from their 52-week highs. A recent journal article noted that as of Jan 7, 36% of stocks in the NASDAQ Composite were down 50% or more from their recent 52-week highs.

The following chart shows the heavy losses some of the hi-flyers are taking. The poster boy of investor irrational exuberance during the pandemic is none other than exercise equipment maker Peloton Interactive Inc(PLTN).Peloton stock has plunged over 81% from its 52-week high. The other pandemic winner Zoom(ZM) is off over 65%. Momentum investors favorite online furniture retailer Wayfair Inc (W) has crashed by over 52%.

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Data Source: Barchart

US large-cap stocks’ decline from 52-week highs:

Disclosure: No positions

Update: 1/17/22

From a WSJ article today:

The tech-heavy Nasdaq Composite has been particularly turbulent. Around 39% of the stocks in the index have at least halved from their highs, according to Jason Goepfert at Sundial Capital Research, while the index is roughly 7% off its peak. At no other point since at least 1999—around the dot-com bubble—have so many Nasdaq stocks fallen that far while the index was this close to its high, Mr. Goepfert said.

The selloff in many individual stocks highlights how shaky the stock market’s 2022 has been. U.S. stocks last week posted a second-straight weekly decline, dragging the S&P 500 and Nasdaq down 2.2% and 4.8%, respectively, to start the year. Some stocks and sectors have moved even more dramatically.

Source: Giant Stock Swings Kick Off 2022, WSJ