Why stocks may be poised for a (relative) comeback

Posted Aug 20th 2007 12:50PM by Michael Panzner
Filed under: International Markets, China, Indices, Market Matters, Money and Finance Today, Japan, Technical Analysis, S and P 500

A chart comparing the S&P 500 index to the MSCI EAFE index (a global benchmark comprised of stocks from Europe, Australia, and the Far East, which has an equivalent exchange-traded fund, or ETF (NYSE: EFA) ) points to a potentially significant shift in the relationship between U.S. and foreign equities.

That is, U.S. shares appear poised for a comeback, at least in relative terms.

Interestingly, this comes at a time when the world at large appears to be suffering from the consequences of a bursting U.S. housing bubble and a meltdown in the American subprime finance sector.

While it is too soon to say for sure, could this be a sign that U.S. investors are beginning to repatriate funds back home? Or that foreigners are reverting to past form with a knee-jerk move towards what has historically been seen as safer shores?

If so, foreign share markets may well suffer disproportionately in the wake of further unwelcome announcements and upheaval in global financial markets.

Some might say that's an ironic turn of events.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.

Tags: economy, etfs, exchange traded funds, ExchangeTradedFunds, featured, federal reserve, FederalReserve, international stocks, InternationalStocks, nasdaq, nyse, stock market, StockMarket, the fed, TheFed

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Reader Comments (Page 1 of 1)

8-21-2007 @ 1:34PM

Friggy said...

The economy is not as rosey as the Wall St.Mafia want you to believe it is.We are dealing with one of the 2 worst presidents ever,ironically they are father and son.GWB has us in a debt we may never overcome both finacially and in "Blood"
People take the guranteed money,to hell with funds and their fron or back loads which return you a pittance more than secure money in the bank.
To hell with brokers that invest in companies such as Home Depot ,a company that fired it's CEO Nardelli and then rewarded him with a severance package of over $220 million dollars,the economic powerrs are so smart the auto industry hired this loser to run it ,I think it is Chrysler,forgive me if I have the wrong dinosaur.
People save your money and screw the idea that "with reward comes great risk" that is broker bull for saying don't expect much and if you lose .we told you so.
The world is changed and we are no longer the power in world finance...