We are now in the last leg of 2019 and it’s been a superbly-rewarding year so far for Wall Street. The key U.S. indexes, the tech-heavy Nasdaq, the S&P 500, the small-cap index Russell 2000 and the blue-chip index Dow Jones rallied as much as 33.9%, 28.3%, 23.3% and 21.9% this year, respectively (as of Dec 20, 2019).
Key events this year that drove the global markets were the three Fed rate cuts, massive global-policy easing in the second half, announcements of the long-awaited phase-one U.S.-Sino and USMCA trade deal, and mild relaxations in the Brexit uncertainty, thanks to prime minister Boris Johnson’s easy win in the U.K. elections.
International Market Trailed the S&P 500 in 2019
However, international markets failed to keep up pace with the U.S. markets in 2019. Though there were pockets of weakness, the U.S. economy has actually been better positioned than most developed economies.
Ebb and flow in the trade war in the first nine months of the year, a slowdown in global economic activities and political crisis weighed on foreign stocks occasionally, causing those to trail the U.S. indexes. Equities in emerging nations, in fact, tanked to a 10-month low level in mid-2019.
The NYSE international 100 index returned 19% this year. International ETFs, like iShares Asia 50 ETF (AIA - Free Report) was up 19.5%, iShares MSCI Emerging Markets ETF (EEM - Free Report) rallied 13.6%, First Trust Latin America AlphaDEX Fund (FLN - Free Report) gained 17.3%, developed market ETF iShares MSCI EAFE ETF (EFA - Free Report) appreciated 17.9% and Vanguard FTSE Europe ETF (VGK - Free Report) has been up 20.3% this year — all short of the U.S. market gains.
Global Policy Easing: A Great Savior in the Second Half
To abate growth concerns, a great cycle of global easing was set in motion. Australia, New Zealand, India, Turkey, Thailand, South Korea, Indonesia, Brazil, Mexico, South Africa and the ECB cut rates in the second half of this year. The ECB even re-launched the QE policy.
As many as 20 out of 32 central banks that Morgan Stanley tracks are currently cutting interest rates with more easing on the horizon. Another key central bank, like Bank of Japan, has been maintaining an ultra-easy monetary policy, if not slashing further. A wave of cheap-money inflows in international markets have finally resulted in foreign equity rally in the second half.
Hidden Gems on the International Front
Despite threats, some international companies trading in the U.S. markets emerged as solid winners in 2019. In this context, we have shortlisted five ADR stocks that crushed the S&P 500 this year. These stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Avita Medical Ltd. (RCEL - Free Report) — Up 694.6%
Headquartered in the U.K., Avita Medical Limited operates as a medical technology company. The company develops and distributes products in Regenerative and Respiratory Medicine. The stock has a market cap of $848.0 million.
Sibanye Gold Limited — Up 222.9%
This South Africa-based gold mining company operates two gold mines: the Kloof Driefontein Complex (KDC) and the Beatrix gold mines. The stock has a market cap of $6.10 billion.
Vipshop Holdings Limited (VIPS - Free Report) — Up 164.8%
The company is an online discount retailer for brands. The company offers branded products to consumers in China through flash sales on its vipshop.com website. The stock has a market cap of $9.7 billion.
Avadel Pharmaceuticals PLC. (AVDL - Free Report) — Up 132.9%
This is a specialty pharmaceutical company, and its product pipeline consists of hospital and paediatrics. The company has a market cap of $225 million.
New Oriental Education & Technology Group Inc. (EDU - Free Report) — Up 125.8%
The company is the largest provider of private educational services in China based on the number of program offerings, total student enrollments and geographic presence. The stock has a market cap of $17.64 billion.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>