This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Global Macro: Stocks Still Resilient

NEW YORK (TheStreet) -- World equities continue to rise as global economic data improve. Trading volume in the U.S. this week remains below the monthly norm, but that can be attributed to the lack of important economic releases and coming end of earnings season.

Although fundamentals will no longer be a reason to push equities higher, investor sentiment and fear of shorting a central bank-driven market should keep prices moving higher.

Trade data out of China Wednesday boosted morale in the region. Chinese equities and commodities have shown broad weakness as concerns about the region's growth remain in the discussion. The pair above is of FTSE China 25 Index Fund (FXI) over Total World Stock Index ETF (VT).


It has seen a drastic decline in relative value since the beginning of the year, but may have found a bottom. With better economic prospects on the horizon, and strength in the commodities sector, Chinese equities could be pushing for a reversal.

The next pair is of Consumer Discretionary Select Sector SPDR (XLY) over S&P Equal Weight ETF (RSP). Cyclical stocks have shown strength recently on a strong earnings season. The U.S. consumer continues to return to the market as the employment picture improves and consumer sentiment rises. The pair above is on the verge of a relative breakout, which would propel both the broader market and cyclical stocks higher.

The final ratio is of Dow Jones Select Dividend Index Fund (DVY) over S&P Equal Weight ETF. Investors will put their money into higher cap, lower volatile dividend stocks during periods of market uncertainty. This pair indicates fleeting investor fear as markets continue to show resilience.

Investor fear picked up toward the end of the first quarter, as seen in the breaking of the downtrend in the price action, but that sentiment looks to have subsided. As the pair falls, it means investors are pouring more money into lower cap, riskier sectors. As long as the ratio shows relative weakness, US equity markets should continue to ascend.

At the time of publication the author had no position in any of the funds mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Andrew Sachais' focus is on analyzing markets with global macro-based strategies. Sachais is a chief investment strategist and portfolio manager at the start-up fund, Satch Kapital Investments. The fund uses ETF's traded on the U.S. stock market to gain exposure to both domestic and foreign assets. His strategy takes into consideration global equity, commodity, currency and debt markets. Sachais is a senior at Georgetown University earning a degree in Economics.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,980.19 +19.62 0.12%
S&P 500 1,980.78 +2.44 0.12%
NASDAQ 4,451.6240 +2.06 0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs