1) International markets: Europe is a modest winner, Asia and Latin America mostly losers. So far in 2014, developing countries like Europe are winners, though losses overnight have moved a few (France) into negative territory.
Japan, one of the big winners in 2013, is down 5 percent as the yen has strengthened against the dollar in 2014—in line with declines in Korea, China, Malaysia, and Hong Kong.
2) Emerging markets: the strategy of investing in emerging markets has collapsed; investors need new alternatives. Goldman's Jim O'Neill started a revolution a decade ago by inventing the BRIC (Brazil, Russia, India, China) investment idea, but that strategy is in tatters. This year, China is down 2.9 percent, Brazil down 6.2 percent, Russia down 5.5 percent, and India is up fractionally.
Jim O'Neill has long since left Goldman, and has long abandoned talking about BRICs. Instead he is promoting MINTs (Mexico, Indonesia, Nigeria, Turkey) as frontier countries—the new BRICs, in essence.
It's a neat trick, moving away from the China orbit, and it's true some frontier markets are doing fine. African redoubts like Kenya and Nigeria are up, alongside Kuwait and Saudi Arabia. Some ETFs like the Global X Nigeria Index and the iShares MSCI Indonesia ETF have started to attract attention, but the volumes are still thin.
Latin America is generally down as the two big countries—Brazil and Argentina—are having major problems.
Just to show you that positive vibes do not translate into success, Mexico and the Mexican ETF has attracted enormous interest in the last year. Mexico has reformed its economy and its proximity to the U.S. makes it an ideal secondary play on the U.S., yet the index was down two percent in 2014 and is down another six percent this year.
The Bottom line: things are very choppy out there.