Global financial markets are navigating powerful crosswinds in 2018.  On one hand, profits for S&P 500 companies have been exceptionally strong, rising 26% over the past 12 months on the back of corporate tax cuts.

On the other hand, markets continue to grapple with uncertainty over trade policy.  This is especially true for overseas markets, which have not experienced the same level of profit growth to offset concerns over trade.

On a short-term basis, the underperformance of foreign markets could persist – or reverse – depending on the direction of trade policy.  Meanwhile, these markets trade at attractive valuations, suggesting continued long-term appeal despite present uncertainty.