President Trump's second term has officially begun. Since winning the election a little over two and a half months ago, the S&P 500 (SPY) has risen 5.42% through today. That's better than any of the other key country ETFs shown in the snapshot below. For the most part, these country ETFs have largely fallen since the US election with the two largest declines coming out of South Africa (EZA) and Brazil (EWZ). More broadly, emerging markets like these have significantly underperformed with an average decline of 8% versus only 1% for developed market countries.  While most country ETFs have fallen since early November, in addition to the US, there are only four that are up on the year: Germany (EWG), Singapore (EWS), Canada (EWC), and France (EWQ).  Canada's gains may come as somewhat of a surprise as the newly inaugurated administration has put the country at the center of tariff talks alongside the neighbor to the south, Mexico (EWW). We provided commentary on these topics in today's Morning Lineup. While EWC has risen, Mexico has been much weaker with a 6.5% decline since the election. Furthermore, Mexico (EWW) is currently the country ETF that's the farthest below its 52-week highs and closest to 52-week lows (3.71% away) of the ones shown.

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In the chart below, we show the relative strength lines of the country ETFs for Mexico (EWW) and Canada (EWC) versus the United States (SPY).  As shown, the two ETFs have seen relative performance drop since the election as tariff tensions have become more of a reality, but that weakness is in the context of longer-term underperformance that has been persistent throughout the past year.

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