It seems that the non US markets are factoring in the worsening US economy moreso then the US public. This is clear when you see all the US 'experts' argue that the economy is getting stronger rather then weaker.
Examples: ~ US factory output for January up 0.70%. Economic experts said: this is great. Economy is beginning to perform strongly. ~ US inventory level up 0.60%. Economic experts said: this a sign that they expect further orders to come through. What if? Coys misanticipated demand and orders where less than expected and they over produced. This is what happened in 2001. The 2 numbers cancel each other out. Not much of the extra product has made it to market. ~ in December a boom in car sales was a sign of strength but now that they dropped in January they are 'unimportant' and people excluded them from the demand figures.
European markets are definately more cautious and I believe they have good reason to be.
Some things to consider: ~ The biggest non-bank credit card issuer in the US last night reported a much larger than expected increase in delinquencies. This does not bode well for the US consumer propping up the economy. ~ The constant attention on the war may actually be shielding the US public from economic reality. As a result any post war rally may merely be another bear market rally. ~ CBOE Volitility index rose to around 40 last week but if you look at July and October lows it was over 50. The number of bears today is also lower than in October. Overall bearish sentiment is much lower now than what it was at previous lows. Usually lows occur when very few bulls remain. I don't think the US has seen this yet but this is only my opinion.
As always the same facts can be interpreted differently. At this moment I think the bearish interpretation is the correct one.
