Market Commentary: There has been a healthy amount of investor skepticism for the past year or more. This “negative” sentiment has helped provide an environment for the market to continue its upward path. However, we are now starting to hear “it’s different this time” stories as arguments against the inevitable market correction. Such stories always concern us. This bull market, we are told, is truly global in nature and therefore “large and long corrections are now a thing of the past”. We don’t buy this argument for a minute. First of all, the US broad market indexes are just now hitting new highs after being underwater for the past seven years. Large and long corrections can hardly be called a thing of the past when we are just completing one now. The Nasdaq provides an even more telling argument, as it still resides 50% below its former peak. Second, there have been many times in the past when the global markets acted in a synchronized fashion. Worldwide bull markets are nothing new; they are simply more obvious now. We are not saying the end of the bull market is imminent, but healthy skepticism appears to be giving way to “new era” bullishness. We all know what happens once the last bear becomes bullish.
Sectors: Energy, Telecom, Materials, and Utilities are still providing the leadership while Financials, Consumer Discretionary, and Consumer Staples all lag.
Styles: The rising tide of US equity markets lifted all style boats this week, and we have an across-the-board improvement. Mid-cap Growth was the strongest of the lot which helped it to capture the top spot in our momentum rankings.
International: Latin America surged this past week with both Brazil and Mexico gaining in excess of 4%. Canada also gained ground, putting a lock on its second place position in our global rankings. Japan is the weakest area on a relative basis, although it doesn’t appear to be in any danger on an absolute basis and has moved mostly sideways in 2007. The strength in our domestic markets this week has allowed the US to gain in our rankings after struggling near the bottom for quite some time.
Sectors: Energy, Telecom, Materials, and Utilities are still providing the leadership while Financials, Consumer Discretionary, and Consumer Staples all lag.
Styles: The rising tide of US equity markets lifted all style boats this week, and we have an across-the-board improvement. Mid-cap Growth was the strongest of the lot which helped it to capture the top spot in our momentum rankings.
International: Latin America surged this past week with both Brazil and Mexico gaining in excess of 4%. Canada also gained ground, putting a lock on its second place position in our global rankings. Japan is the weakest area on a relative basis, although it doesn’t appear to be in any danger on an absolute basis and has moved mostly sideways in 2007. The strength in our domestic markets this week has allowed the US to gain in our rankings after struggling near the bottom for quite some time.
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