No brakes in Bernanke’s racecar, the only question is how hard to press the accelerator and the markets demand pedal to the metal. The mere mention of easing up for the turns was like throwing marbles on the racecourse and like we suggested yesterday, a glance at our home screen provides an interesting view of the worldwide reactions.
Interesting to us anyway, because our finely honed machines handled the adverse conditions splendidly. The Geographic Indices show Latin America and Middle East & Africa both down more than 3% while Europe and Asia-Pacific each lost more than 2%. In that context, the US broad market funds that have been dominating the ranks look like winners losing less than 1.5%. Under the Sector tab, all 10 were down on the day but the Energy and Info Tech Indices kept their losses to less than 1% and readers know those have been leading the recent sector recommendations of our Quant and Green Diamond Reward models. The yellow flag must be out because those same funds mostly continue in their positions.
International funds provided accurate price discovery for their markets that had yet to open as overnight trading has largely confirmed yesterday’s moves in the US based ETFs. Today brings another lap of racing and we will be watching the iShares MSCI Canada and Italy Index Funds (EWC and EWI), the only foreign names in today’s top 10 at 2nd and 9th place. Quant doesn’t make short term calls but both have decent Fundamental Scores and elevated sentiment readings for that extra kick of octane. Both of our Dynamic indices contain 4 foreign funds which mostly outperformed their peers helping their indices outperform the S&P 500 in yesterday’s smashup.