The formerly leading Nasdaq index has been lagging behind the broad US market which might mean some flow rotating to smallcap (RTY) since it is taking the lead lately. During the last month the markets didn’t reward taking risk on either side of the tape, none of the main geographical areas provided definite trends.
According to the EMU periphery bond markets their crisis is way behind us but the EU growth will stay subdued for a longer period of time, especially if current geopolitical tensions remain.
I can say that I’m still optimistic on US equities because the macro data indicates that the overall growth is strong enough even though the monetary policy changes will introduce volatility. The European story is much more fragile as we have been able to see the DAX tumbling on worse than expected Chinese data – and we have yet to see the bulk of it, I suppose.
Latam honestly surprised me this week, they erased their losses compared to global EMs however I’m trying not to read too much into it because they haven’t broken out of their downtrend yet.

Somehow it feels like equities are running out of steam so noise will make it harder to predict market movements now more than previously.


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