Global stocks are gaining, if not at the pace of domestic equities. While the S&P 500 has risen 17% year to date, the EAFA index of large- and mid-cap stocks based in countries other than the U.S. and Canada has gained 9.5%. Over the past five years, the performance gap has been wider, with the S&P 500 advancing 94% compared to a 32% gain in EAFE. But the underperformance has given global stocks a valuation advantage, particularly in the area of dividends. Consider that the EAFE dividend yield of 2.9% is 170 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors, who have endured recent wide swings in prices for rate-sensitive equity in areas such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S. interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection of companies that pay dividends, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term BUY rating from an Argus analyst. Note this list of approximately 25-30 companies offers exposure to eight of the 11 major industrial sectors. The list includes companies from 10 countries.

The benchmark U.S. 10-year Treasury bond yield is back below 4.0%, down sharply from an enticing 4.7% less than six months ago. Sovereign rates around the world generally have headed in the same direction, with the UK's benchmark yield also in the 3.9% range, Germany at 2.2%, and Switzerland down to 0.4%. Japan is an outlier, as its central bank recently raised its key interest rate for the first time in over a decade, roiling financial markets. We doubt that move will be replicated by other nations, as global economic growth is expected to cool this year to 3.2% from 3.3% a year ago. And even with the hike, Japan's benchmark bond yield is still below 1.0%. Elsewhere, political uncertainty in South Africa and Brazil are keeping those sovereign debt interest rates near 10%. Russian debt yields are close to 15%, up 300 basis points from a year ago, as the conflict with Ukraine drags on and inflation runs at a 9% rate. Looking ahead, the recent decline in U.S. Treasuries is forecasting a series of upcoming short-term rate cuts by the Fed. If that's the case, and form holds, long-term U.S. Treasury yields may stay in the 3.5%-4.0% range as the domestic economy continues to grow. That's not a bad return, with inflation rates subsiding. From a portfolio perspective, we would avoid over-weighting foreign-government fixed-income securities at this time, given their volatile yields, sovereign risks, and repatriation issues.

GSK plc, based in Brentford, UK, is a global healthcare company engaged in the discovery, development, manufacture and marketing of pharmaceutical products. The company's leading products include treatments for asthma and COPD; products for HIV infection; and a range of vaccines. The company has active research and development programs in immuno-inflammation, neuroscience, metabolic pathways, ophthalmology, respiratory and infectious diseases, and biopharmaceuticals.

On Monday, August 5, the S&P 500 (SPX) fell right to its lower channel off the lows in October 2022 and March 2023. Yes, that is the trendline we didn't trust because it was busted twice in October 2023. We also got close (at 5,119) to a 78.6% retracement of the rally from April until July (at 5,107). The SPX cycled into oversold territory at 30 on the 14-day relative strength index (RSI), but could become more oversold. The rising 200-day is at 5,012, while the April low is at 4,967. One of our favorite charts is the weekly SPX with the 200-week average and the weekly Bollinger Bands. While we still have some distance, the slightly rising lower band is down near 5,000 as of this writing. A touch/undercut and then a recapture of the lower band generally has indicated an excellent time to buy the index/market. A good confirmation would be a move back over the middle band. But note the failures in 2022's bear market: two times the SPX failed at/near the middle band, while a third move surpassed the middle band but ended up failing The VIX exploded to 66% at the open on August 5, its highest level since the pandemic. The three-day rate-of-change (ROC) was 136%, the highest since early 2018. Since 1990, this is the third-highest three-day ROC. We had a three-day decline of 9% in 2018 and a two-day decline of 6% in 2015. The VIX moves sharply when stocks move lower quickly lower. The three-day SPX decline was 7.3% at the lows on August 5 and ended the day at 6.1%. Both the drops in 2018 and 2015 were followed by a quick rally and then a retest of the lows or a double bottom. Both double bottoms were followed by major rallies that failed.