Country Ranking Model - February 2023
Source: MSCI
There were many notable moves in the rankings this month. For example, the United States has fallen to #32 out of the 33 countries in our universe as US leading economic indicators such as PMI have deteriorated, US equities have underperformed international equities recently, CDS spreads have widened, and the US market remains very expensive. In contrast, many European countries have risen in the rankings as the Euro has appreciated and the dire forecasts for a European recession may have been overstated. This is evidenced by the fact that Italy, Austria, Poland, France, Spain, Germany, Netherlands, and Switzerland all rose, on average, 6.75 spots this month.
February Country Rankings
Italy (#1): Moving into first place this month is Italy. Since the dust settled on its lastest political crisis and a clear majority was formed in parliament in October of 2022, Italy has significantly outperformed the global benchmark. Italy’s momentum ranking has now risen to 7th. Its fundamentals, risk and valuations are also strong and the country is enjoying improving CDS spreads and one of the highest growth to P/E ratios in our universe.
Norway (#2): Norway has fallen from first place into second place due to poor technical attributes and poor short & medium-term performance. January saw Norway return -2.45%, the second worse performer in our universe for the month after India (-2.99%). Nevertheless, the country still has very strong fundamentals (ranked 5th), risk (ranked 2nd), and valuations (ranked 6th).
Austria (#3): Rising 10 places is Austria on the back of improved fundamentals and momentum. Austria’s valuation also stands out with very attractive earnings yields and price to book. The country has weathered the energy crisis well. Prior to Russia’s invasion of Ukraine in February 2022, Austria imported 80 percent of its gas from Russia. By October 2022, Russia accounted for just 23 percent of Austria's gas imports.
Country Performance
Data as of 1.31.2023
Source: MSCI
Country Ranking Model
As of 1.31.2023
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