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.
Germany is the "Capex" (Capital Expenditure) king. Siemens, BASF, Daimler Truck—these companies sell the machines that make other things. SPY sells the software that runs the office.
This relies on the Global Manufacturing PMI (Purchasing Managers' Index).
PMI > 50 (Expanding): Factories are buying robots and chemicals. EWG outperforms.
PMI < 50 (Contracting): Factories cut spending immediately. EWG tanks. SPY is resilient because you can't cancel your Microsoft subscription as easily as you can delay buying a new turbine.
When to use it: This is a hedge funds "Global Growth" thermometer. If this ratio is diving, the global industrial economy is in a recession, even if the US consumer is still spending.