Series
What is this indicator?
As most of naive country-to-country indicators, it does not compare one economy to another. This is more about structural differences in the economies and market regimes.
France's CAC 40 is a "Global Luxury ETF." LVMH, Hermès, Kering, and L'Oréal dictate the movement. These stocks have high gross margins (like Tech) but depend on physical consumption by the emerging middle class in Asia.
In a way, this ratio is a proxy for Chinese Credit Impulse. When China stimulates its economy, the first thing that happens is a spike in demand for French luxury and German cars.
If you see headlines about "China Stimulus" or "Chinese Retail Sales beating expectations," EWQ/SPY will rip higher. When hedge funds want to bet on a Chinese recovery but are too scared to buy Chinese stocks directly (due to political risk), they buy France as the "clean" derivative.