Loading ...Spot The Difference Competition
“One of these things is not like the others. One of these things is not quite the same.”
VEU = World SM’s excluding US
EZU = Eurozone
EEM = Emerging Markets
FXI = China’s Blue Chips
One way or another, the divergence between US & RoW equities (using the above as proxies), is going to be resolved.
Either they meet in the middle, RoW rallies back up to US, or US falls to converge with RoW.
U S A ! U S A ! U S A!
ROW = lots of dollar based external debt, charging off at rising US interest rates (thanks to global QT) and further squeezed by negative FX carry trends.
US = the hot capital beneficiary of the squeeze on ROW
so those divergences will resolve, or magnify, depending on what happens to rates from here ..
cuing Lacy Hunt