So what does it all mean? On the one hand, assets representing the global economy – excluding the US, Europe, and Japan – are underperforming. These divergences suggest that the equity rally remains at risk and is vulnerable. How long can the US, Europe, and Japan go at it alone and keep this rally going? On the other hand, if central bankers are able to keep the “balls in the air” a bit longer, copper, China and Latin America might represent good low risk opportunities. After all, you would be buying at support levels. Certainly, the bulls can point to a bounce in China (ooo hah –nothing like a rally in Chinese stocks to get the animal spirits going) and copper as reasons why this rally should continue.
Chart of the Week Video: Global Economic Risk and the Money Printers