International Equities moves to number 1 in the NDW DALI Asset Class Rankings!
International Equities moved to number 1 within the NDW DALI Asset Class Rankings for the first time since 2023. While International and Domestic Equities are tied in tally (buy) signal count International emerges as the top asset class due to the group possessing superior near-term relative strength (X ranking within DALI’s relative strength matrix) versus other asset classes. Bear in mind, the top three asset classes – both equity asset classes and Commodities - still reside within 2 tally (buy) signals as of Thursday’s (6/12) close and International continues to be the most improved from a long-term relative strength basis since market lows in April.
While users await to see if International Equities can sustain as the top asset class within the NDW DALI Asset Class Rankings, evidence of the broader asset class’s strong technical picture can be found on the Asset Class Group Scores (ACGS) page. As a brief aside, users who may not be familiar within the Asset Class Group Scores should note the tool utilizes the NDW Fund Scoring System (from 0 to 6) to evaluate and rank over 130+ asset class groups. It offers a more granular, intermediate-term look at the broader market, and part of the tool’s greater sensitivity within compared to DALI is due to a trending evaluation that is considered within the fund scoring system.
With all that said, two notable asset class groups – All Global & International Diversified and All US Equity Diversified – have recently seen the difference between their group scores reach the highest in favor of the international group since 2008/2009. All Global & International Diversified has generally been scoring above the All US Equity Diversified group since early March this year, apart for a few days in early April. This current stretch of superior strength by the international group on the ACGS page sits at just over 3 months and marks the longest since period favoring the international group since May 2017 to May 2018. As noted earlier the difference between the two groups is at its highest in favor of the international group since 2008/2009, which encompasses the 1st (May 2004 – August 2008;1057 trading days) and 3rd (May 2009 – February 2010) longest periods in which the international group was favored versus the domestic group.
Given the rise in DALI and superior leadership on the Asset Class Group Scores page, the weight of the evidence is overwhelmingly positive for International Equities and asset allocations should be adjusted, if not already done so.
For much of the year, developed markets had been the driver behind improvement within the broader international space. Since the April lows for the broader global market, both the Global Developed Markets and Emerging Markets Diversified have climbed to scores above the 4 score threshold for the first time in 15+ years. When considering an international equity allocation, both developed and emerging markets show strong enough technical evidence to warrant exposure broader based exposure. Those looking to be more tactical within International Equities will look to overweight European exposure over other regions; though each regional group within the Asset Class Group Scores page scores above the acceptable 3 threshold. With the broader strength offered within International, opportunity is prevalent. Some countries and regions have rallied into overbought territory with this week’s action so investors are likely to look for consolidation at current prices or a pullback to more actionable territory within their 10-week trading band.
