Tuesday, March 19, 2013

Can Developed Markets decouple from Emerging Markets...?

The original question used to be "can Emerging Markets really decouple from Developed Markets?".

This time around, it looks more like Emerging Market stocks along with commodities, freight rates and purchasing manager indices are "smelling" another round of deceleration in the world economy, while those G7 markets that are supported by central banks' psychological and/or money-printing operations seem to have decoupled from reality....

So when the supposed growth engines of the world economy apparently fail to deliver their growth promise, we
reiterate our warning from February:  Watch out below.

Developed markets are strongly overbought, and sentiment is maximum bullish, according to many of the surveys that we track. So is everybody on board now for a good-sized  reversal to the downside?

Risk-off - Reality on ...?

What do Emerging Market Stock Indices know that we don't ?

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