Last Updated on 09/09/2026
Stock markets around the world continue to advance, but a series of central bank meetings in the coming weeks will put investors’ confidence to the test. At the same time, government bond yields are climbing across major economies. The key question is whether these higher yields are signaling stronger-than-expected economic growth, renewed inflation pressures, or growing concerns over fiscal debt.
Equity markets are clearly pricing in continued economic expansion—and we share that view. Here’s why:
Global Stock Markets
The ratio between US equities and developed-market equities outside the US has moved sideways since early 2025, following a 15-year period of sustained gains. Over that period, both markets have delivered comparable returns.
The US-to-emerging-market MSCI ratio has started moving higher again in recent weeks, although both remain below their 2024 peaks. Emerging markets were the main driver of global equity gains during the first half of the year before surrendering some of those advances in July. The recent shift suggests the performance gap may once again be narrowing.
September is still in its early stages, but Brazil currently leads the country ETF rankings, gaining 5.1% month-to-date in US dollar terms. South Korea follows with a 4.4% gain, while Taiwan is up 3.8%. The US ranks near the bottom, with an increase of just 0.4%. The latest week therefore provided another boost for the global-investment theme.
The ACWX and PBUS ETFs have moved closely together since Liberation Day last year. The fact that the global bull market has remained relatively balanced between US and international equities for more than a year is particularly notable.
Performance across major international equity ETFs has been mixed since early 2025, when global markets began outperforming—or at least keeping pace with—the US. Japan and emerging markets have gained ground relative to US equities, while the Eurozone has lost momentum and the UK continues to underperform.
Earnings and Valuations
US equities currently trade at a forward P/E ratio of around 19.8, compared with 13.1 for the All Country World ex-US index. Both valuations have declined this year because corporate earnings have grown faster than share prices.
Forward earnings expectations for the All Country World ex-US index continue to rise, with analysts increasing their estimates for 2025, 2026, and 2027. The projected jump from 2026 to 2027 is particularly strong, while forward earnings remain on an upward trajectory and continue to reach new highs.
Developed markets outside the US are showing a similar earnings trend.
Emerging markets have posted the strongest earnings outlook among the three major groups. South Korea and Taiwan are responsible for much of this momentum. Consensus estimates for 2026 earnings growth have climbed to 333.9% for South Korea and 56.9% for Taiwan.
Global Bonds
Bond yields are moving higher across most major economies. The UK’s 10-year government bond yield stands at 5.14%, while the US 10-year yield is 4.78%. France is at 4.19%, Germany at 3.34%, and Japan at 2.91%.
China remains the notable exception. Its 10-year government bond yield is only 1.68% and continues to trend lower.
For much of the period following the 2008 Global Financial Crisis, government bond yields remained significantly below nominal GDP growth. That environment has now changed. Bond yields have moved closer to nominal GDP growth across major economies and have already surpassed it in countries such as France and the UK.
Currencies
The US dollar continues to hold relatively firm. The DXY is around 99.2 and remains within the long-term upward channel that has contained the index since 2011. Concerns about de-dollarization tend to resurface whenever the dollar weakens, but so far, the DXY has provided little evidence of a structural shift away from the greenback.
The Japanese yen has strengthened significantly over the past week as traders have reassessed both the timing and potential pace of further monetary tightening in Japan.
The South Korean won has also reached its strongest level in more than a year. Korean exporters have been converting dollar revenues into won amid a substantial trade surplus, while proceeds from a major US listing have provided an additional source of foreign-currency inflows.
Commodities
Commodity markets are increasingly becoming a source of inflationary pressure. Rising grain prices could begin feeding into food inflation across economies around the world.
Diesel prices are another area to watch, given their importance to industrial activity and transportation. Spot diesel prices have risen sharply in recent weeks, potentially adding further cost pressures for businesses and consumers.
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