logo
  Join        Login             Stock Quote

Stay Long USD Assets

 May 02, 2012 08:34 AM
 


(By Cam Hui) Sometimes it's useful to sit back and examine the technical leadership of the market to see where the strength is coming from and to understand the message of the market. Instead of the usual analysis of technical leadership from a sectors or market cap perspective, I thought that I would do something slightly different and look at the global picture of international stock leadership.

The bottom line? The current macro outlook is highly uncertain, suggesting that the near-term path for equities will be choppy and volatile. The charts are showing continued leadership by US equities and the US Dollar. All other global regions are underperforming. Under these circumstances, I would stay with the strength and concentrate the bulk of any equity exposure in the US and overweight USD assets in a global portfolio.


Where is the leadership?
The chart below shows the relative performance of US equities, as represented by SPY, against ACWI, or the ETF for the Morgan Stanley All-Country World Index. Since all prices are quoted in US Dollars, the currency effects have all been filtered out of the analysis. As you can see, US equities have been in a relative uptrend against ACWI for about a year:


What about Europe? The market is telling us that it is indeed concerned about the eurozone, as its equities have been underperforming for over a year.


The other large developed country in EAFE is Japan. The performance of Japanese stocks is nothing to write home about. They are either flat to weak against ACWI, depending on you interpret this chart.



Emerging market equities have not been a pretty picture.

Next Page >>123
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChart Says This Retailer's Comeback Isn't Finished

One of the surprises, at least on the surface, of the market's recent swoon was the outperformance of read on...

article imageETF Performance Review: Major Asset Classes | 19 Dec 2014

It’s all about real estate investment trusts (REITs) these days when it comes to bullish performance among read on...

article imageOil and Global Stock Markets Rebounding Sharply

So far so good on our expectation of a 4 to 5% pullback and then a resumption of the bull read on...

article imageGrading the FOMC

Love its members or loathe them, you have to admire the gradual impact the policy-making committee has had read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.