After last year’s tumultuous market run, analysts are still looking for clues that hint at the market’s attitude for 2015. So far, one thing is known for certain: The United States is a top performer and the rest of the world is lagging behind. But can the U.S. keep growing while the world stagnates?
Let’s take a look at the facts: The United States’ largest trading partners abroad consist of China, the European Union and Japan, with $1.2 trillion of trade taking place every year. This represents 29 percent of all trade the U.S. has with foreign countries. This makes American companies more reliant than ever on key foreign economies. And in today’s world, all countries are increasingly reliant on one another as globalization expands.
But China, the Eurozone and Japan are all experiencing significant economic slowdowns. While China and Japan have kicked stimulus spending into high gear, the EU has yet to do so. With last year’s collapse in oil prices, most major countries are experiencing deflationary pressure, which is the last thing the U.S. wants to see after spending more than $12 trillion since 2008 to keep the economy going. At least for the foreseeable future, America’s economy is still trending upward. But only time can tell us whether the U.S. can continue to go it alone.
To start the year, clearTREND research produced by Appleton Group indicates upward trends in small, mid- and large-cap stocks along with downward trends in foreign emerging markets. clearTREND’s U.S. Economic Health Index™ shows 73 percent of U.S. sectors expanding, an improvement over December. “The theme in 2015 continues to be the stimulus, and whether it will continue or not,” says Mark Scheffler, senior portfolio manager and founder of Appleton Group. “With more stimulus, the markets and the economy can continue to chug along, but without help it’s clear that it could be a real struggle. Get ready!”
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