Although global stock markets ended on a down note last week, January tends to be a strong month for global stocks.
Global stock markets had a strong week last week, as they bounced strongly from a weak start to December. With stocks up in early trading in Asia and Europe, the stock rally may continue into the New Year.
Over the course of the last week, there has emerged a surprising divergence between the performance of U.S. and global stock markets. Even as the U.S. stock market hit new highs for the year, many foreign markets have pulled back from their recent highs. In addition, the recent sharp pullback in the price of gold has hampered the performance of your holdings in Market Vectors Gold Miners ETF (GDX) and Freeport-McMoRan Copper & Gold Inc. (FCX). Finally, the 5%+ appreciation of the U.S. dollar against foreign currencies is acting as headwind against returns from foreign stocks.
Emerging market stocks as a whole have had a mixed first few weeks in December, sliding back for two weeks in a row. But three of your Global Bull Market Alert positions — Mechel (MTL), Vimpel-Communications (VIP), and Trina Solar Ltd. (TSL) — each had big weeks, soaring 9.2%, 7.1% and 6.7%, respectively.
This week’s Global Bull Market Alert pick combines two headline-making sectors, China and solar power. Both China and the solar sector went through a boom-bust cycle over the past 18 months. Both have also recovered strongly. And Trina Solar Ltd. (TSL) is a terrific way to profit from this recovery.
Last night, I had s chance to chat with Jim O’Neill, Goldman Sachs’ head of global economic research, after a presentation he gave here in London.