This article originally appeared on RealMoney.com on Sept. 2, 2014 at 6:53 a.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.
You look at the charts. You study the fundamentals. And you get the same thing. Even on an up day like this one, the market's going to distinguish between stocks that get hurt by a Ukraine-Russia conflict and stocks that are unaffected by it. We are now well into discounting a protracted conflict on the Ukraine border without any sign of a diplomatic solution.
It's been a brutal period for some stocks and halcyon days for others. The S&P 500 keeps bumping into new highs because many of the U.S.-based international companies we had been banking on to produce multi-year growth, as they finally started getting revenue relief, are now rolling over and that money's pouring into domestic winners. It is true that many of the internationally-oriented stocks have rallied since the downing of flight MH-17, the benchmark of the international downturn, but they are stalling out and you need up days like today to trim them.
It's logical. The worldwide companies' estimates could now prove to be too high because of a combination of a recession in Europe and a too-strong U.S. dollar.
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Before I get to what's working, let's just rule out what Europe's done for us. To do this we just need to go back to when Europe was first going awry back in 2012. We realized that tech, which has such a heavy emphasis on Europe, would not be able, en masse, to make it numbers. Now there are some special situations playing out here, notably the return of the PC to growth, which you can monitor with Hewlett-Packard (HPQ) , even it has a ton of Europe. And some of the cloud plays can still brag of plus 60% growth rate (see Splunk (SPLK) ). But I don't think the group will be able to transcend Europe when there are so many companies that do not have any Europe to choose from.