The Dow Jones .Industrial Average rallied on the last day of January due to the Federal Reserve not raising interest rates. The market has been in rally mode for most of the last month. The top performing indices for last month were all Chinese market indices they were up anywhere from 14% - 30%. This month letâs focus on the other top indices:
- Dow Jones US Trucking Index (19.96%)
- Dow Jones Wilshire Real Estate Operating Index (16.64%)
- Dow Jones USTire Index (16.41%)
The worst performing indices were:
- Bank of New York VenezuelaADR Index (-31.55%)
- Dow Jones US Distillers & Vintner Index (-10.20%)
- Bank of New York IndonesiaADR Index (-8.80%)
Areas of the market in buying mode are:
· Russell MidCap Value Index
· Dow Jones Asia/Pacific Gas Index
· Dow Jones World ex Asia Utilities Index
Over the last four years the Dollar Index has fallen over 30%. Who will benefit or lose when it goes the other way. The American equity market will benefit and Foreign ADRs will suffer. The real question is when China's bubble will burst. With triple digit growth in the last year their market looks very overbought. If the Yuan is ever floated like normal currencies it could prove disastrous to foreign investors in that market. As long as it is pegged to the dollar and the American public keeps going to Wal-Mart, their market will continue grow. Demand for consumer goods due to a rising middle class will continue to propel their market and commodity prices world wide.
A safer emerging market with the same fundamentals may be India. Their floating currency and highly educated, under employed work force has kept a bubble from growing like China's. Their consumer demand is growing, as a western style middle class is emerging. Maybe Wal-Mart should put more emphasis on growth there
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