Canada and Australia
. Even if one is quick to dismiss the emerging-market underperformance, how can one be quick to dismiss the strongest economies (at present) in the developed world? Australia and Canada are both projected to grow at a faster clip in 2012 than the U.S.; Canada and Australia both have a better employment situation.
S&P SPDR Trust
picked up 5.4% in five days, while
iShares MSCI Australia
logged a feeble 0.4% and
iShares MSCI Canada
registered a paltry 0.8%. This one can't even be blamed on faltering currencies, as the
CurrencyShares Canadian Dollar
gained roughly 1.5% on the dollar over the week.
One might say that energy-rich Canada and materials-rich Australia are slumping due to a slowdown in the global growth story. Fair enough. Yet if that slowdown is real, it would hit U.S. equities sooner or later. Once more, without these healthier developed countries rallying, one would need to curb one's enthusiasm for the five-day U.S. phenomenon.
Commodities Still Faltering
. This week was "risk on" for the U.S. alone. And while that may have a great deal to do with the dollar's gains, relief over Europe and/or perceived safety of U.S. multinationals, there's no ignoring global growth fears.
PowerShares DB Base Metals
was down 1.0% over the week.
iPath DJ Copper
PowerShares DB Agriculture
Commodity stocks, which do not necessarily correlate with the underlying commodities and frequently correlate with the equity markets themselves, also struggled.
Market Vectors Coal
gave up 0.6%,
Market Vectors Rare Earth Miners
fell 1.1% and copper-heavy
iShares MSCI Chile
We can blame the dollar for some of the angst. Yet the evidence suggests that, even with sovereign debt band-aids, a return to bull market form will require foreign market participation. That is, without global economic growth showing definitive signs of improvement, U.S. stocks can only climb so far.
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