Strange Start to Year

A strange start to the year: Europe all up, Asian developing markets all down, U.S. mixed.

Weak Start for Asia This Year:

Indonesia down 8.8%
India down 7.3%
China down 3.3%
Thailand down 2.5%

Strong Start for Europe This Year:

Spain Up 10.8%
Italy Up 10.2%
Greece Up 8.7%
France Up 6.1%
Portugal Up 3.9%
Germany Up 2.4%

Why is this split happening? Because the growth in China has many concerned about more aggressive rate hikes in that country. And European economies are improving and there is a perception they are moving to deal with the debt issues, particularly in the critical country of Spain.

Here in the U.S., while U.S. indices are not so split (the big indices all up about 2 percent for the year), this week is a little strange:

Dow Industrials up 0.7%

S&P 500down 0.5%

Nasdaq down 1.6%

Russell 2000 down 3.4%

This too can be explained, since the Russell has outperformed the S&P 500 since the most recent leg of the rally began in September, up almost 25 percent vs. the 19 percent gain of the S&P 500.

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