Nov 2, 2020 - Economy

Asia's recovery is helping its stock markets outperform the U.S.

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

Asia's improved economic outlook is helping push stock markets in the region ahead of U.S. equity indexes.

Details: In fact, Asian equities are performing better even as markets sell off, which is normally highly negative for Chinese and other emerging Asian markets traditionally seen as more speculative and risky.

What's happening: MSCI's index of Asian equities excluding Japan has outperformed its index of U.S. stocks year to date as Asian companies have weathered the recent slowdown better.

  • It's a far cry from the beginning of September when U.S. stocks hit their recent peak and the American index was outperforming its Asian counterpart by nearly 9%.

Why it matters: The far better recovery from the coronavirus pandemic in Asian countries is helping their financial markets bounce and draw more capital.

Between the lines: Asian stocks, and those in emerging markets overall, had strengthened more than comparable U.S. stocks as the dollar weakened earlier this year, but even in the face of recent dollar appreciation Asian stocks have held their ground.

  • Since Oct. 12, MSCI's index of Asian equity markets has outperformed MSCI's index of U.S. shares by more than 5% and outperformed MSCI's European bourse by more than 7%.
  • MSCI's all-country world index (ACWI), excluding U.S. stocks, has outperformed its all-country index including U.S. shares during that time.
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