two things:
–for almost two decades, there’s really been no reason for investors to bother with any stock market other than the US. This is in part because of political woes elsewhere–the continuing demise of Japan, Brexit, the rise of Xi in China. Mostly, though, it has been the economic strength of the US and the country’s role as the world’s technology center. Not so this year, however. The US market is a very distinct laggard.
–I get no sense that the downtrend in the US stock market, either in absolute terms or relative to other markets in the world, is close to being over. On the other hand, I get no strong sense from current stock price action that a lot more bad is still to come.
Two reasons for the latter.
The simpler is that a large portion of the earnings of the S&P and NASDAQ come from abroad. Companies are required to disclose this in their 10ks, but since this is commercially valuable information tend to do so in as unclear a way as they can get away with. Half is a reasonable guess, but for IT in particular it’s probably significantly more.
The other is that given that Trump’s tariff ideas are bad for the US economy–and that his failure to understand this is lost likely not a pretense (a scary combination)–it’s hard to assess how much of his program will actually get done. So far there seems to be no opposition at all. However, the market seems to be thinking that some will soon emerge.
what I’m doing
–I’m buying Hong Kong stocks for the first time in ages
–I’ve tilted my holdings toward you-can’t-fall-off-the-floor value names