After a promising start, year-to-date, international stocks are now trailing the S&P 500. At mid-year, despite a strong U.S. dollar, the MSCI ACWI ex-USA and MSCI EM ex-China indexes essentially matched the S&P 500. Indeed, through June, the developed markets index was ahead of the S&P 500 nearly two-thirds of the time, while EM ex-China surpassed the S&P 500 more than 90% of the time. Recently, as global recession fears have intensified and the U.S. dollar has soared, both international indexes now slightly trail domestic stocks. Nonetheless, we are sticking with a tilt toward global stocks—particularly EM ex-China—primarily because we expect the U.S. dollar to soon dive!