The American Flu

Saturday, July 28, 2007 | 10:15 AM

Global_boursesContrary to what you may have heard on Bubblevision, U.S. markets have been badly lagging the rest of the world's bourses year-to-date.  As Jim Picerno's nearby table makes apparent, the rest of the world's markets have badly outpaced those in the U.S.

This should come as no surprise, as the rest of the world's economies have similarly outperformed the "Bush Boom."

Ironically, this leads to some unusual if belated realizations.

Sandra Ward, Barron's emerging market's columnist observes:

"Ten years ago this month, financial calamity of nearly unprecedented proportions in the post-war period crippled developing Asian economies, spread to emerging markets around the globe, derailed the U.S. economy temporarily and ended up toppling one of the highest-profile hedge funds of the time. The Asian flu, it was called.

Now, emerging markets could catch a bad case of the American flu." 
(emphasis added)

After this week, further evidence of this lag is showing up in all manners of ways.

Consider the Russell 2000 -- the index of fast growth small cap stocks. IT IS NOW NEGATIVE YEAR TO DATE. This is especially significant, considering the Russell has been leading the Dow until about a year ago. (We noted the rotation here at the time).


Is the Bloom off Emerging Markets?
Barron's July 30, 2007

Russell 2000 Falls 1.72%, Into the Red for 2007
WSJ, July 28, 2007; Page B3

Saturday, July 28, 2007 | 10:15 AM | Permalink | Comments (57) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Here is what I don't the market has only given up July's and maybe some of June's gains at this point but I read 23% of NYSE is at 52 week lows?

If I could use a Barry word favorite here I would say this looks like a "bifuricated market".

Posted by: JohnnyB | Jul 28, 2007 10:35:38 AM

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