“There is always a bull market somewhere.”: The Generational Breakout in Ex-US Equities
While US tech has been dwarfed/resized by AI in 2026, global markets have done much better.
For the better part of the last 15 years, global capital has been highly concentrated in U.S. equities. However, a technical and macroeconomic review of the Vanguard FTSE All-World ex-US ETF (VEU) indicates that a historic reallocation of global capital is now underway.
From a technical perspective, the most critical development on the long-term monthly chart is the decisive break above the 64.02 resistance level. This price point represents the absolute peak of the 2007/2008 pre-financial crisis market. By clearing this ceiling, VEU has completed a 15-year consolidation base, signaling the start of a secular uptrend.
Furthermore, the asset has broken above its uppermost of three primary ascending trendlines. Shifting out of a steady ascending channel into a steeper trajectory indicates an asset entering a momentum-driven markup phase fueled by institutional accumulation.
This technical resolution is supported by concrete macroeconomic fundamentals:
Valuation Normalization: The historic valuation premium of U.S. markets over the rest of the world has reached extremes. Capital is now seeking more attractive risk premiums and higher dividend yields in Europe, Japan, and Emerging Markets.
The U.S. Dollar Cycle: The sustained strength in unhedged international equities implies a structural softening of the U.S. Dollar, which mechanically eases global liquidity conditions.
Sector Composition: Unlike the technology-heavy U.S. indices, VEU is heavily weighted toward traditional sectors such as financials, industrials, materials, and energy. Outperformance here points to a global environment favoring physical infrastructure, supply chain reshoring, and commodity demand.
The data indicate that the era of exclusive U.S. market outperformance has concluded. Investors heavily concentrated in domestic markets should critically evaluate their geographic exposure for the coming cycle.
I expect the rise in ex-US stock markets to continue and accelerate in the months to come.
Full analysis → https://closelook.net/pulse