Monday, October 09, 2006

Louise Yamada: Financial markets becoming less Ameri-centric

The U.S. is becoming less important as a driver of global market performance.

That's according to Louise Yamada, managing director, Louise Yamada Technical Research Advisors. Yamada, a 24-year veteran of technical research at Smith Barney (Citigroup), spoke on "The Evolution of New Structural Trends" to the Boston Security Analysts Society on October 5.

Why the shift away from the U.S.?

Yamada identified some key developments:
  • Rising global liquidity
  • Chinese exports exceeding those of the U.S.
  • U.S. becoming a smaller piece of global GDP
We may experience a shift to non-U.S. markets outperforming the U.S., said Yamada. However, if you pick the right stocks in the U.S., you may do well. That'll probably require investing in companies with innovative technology, she said.

Some other arguments made by Yamada:
  • The bull market in bonds is ending, but interest rates could be in a trading range for awhile
  • Gold is in a bull market, though it'll fluctuate sideways before rising
  • Oil prices may never return to their old lows
  • Inflation may be shifting from heavy industrials to consumer essentials (food, water, energy)

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