While the U.S. market recovered from last summer’s correction and went on to recent new highs, it’s looking increasingly like global markets outside of the U.S. rolled over into a bear market last April, and that their rally off the October low was only a bear market rally within an ongoing bear market.
The FT World Index EX-USA plunged 22% last summer, exceeding the official 20% decline that defines a bear market. And the rally off the October low only partially retraced that decline before rolling over to the downside again in what looks like the beginning of a typical 2nd leg down.
For over a year now, global markets outside of the U.S. have been correctly fearing that the eurozone debt crisis, austerity programs, slowing economies, and actual recessions in Europe, were a serious threat to global economies.
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