Heard some scary stats the other day: America has a 50% chance of recession… and consumer confidence is as low as it was during Katrina.
So what?
Does the American market really matter any more?
I mean, yes it does… from the point-of-view of individuals… we always want the best for our friends, neighbors, and fellow Americans.
And, of course, more business is always better than less.
But, from the point-of-view of the stock market, maybe not.
After all, almost every large U.S. company derives most of its revenues from overseas these days… and, whether we like it or not, international growth is red hot.
Just look at Cisco’s recent earnings. They nailed their numbers but cited some "weakness" in their U.S. segment and, blam, the entire U.S. market "corrects" 10% during November.
Only, the rest of the world didn’t follow suit.
To add to this contrast, even the head of international sales for Cisco said — in a most diplomatic way — that he didn’t know what the hell his U.S. counterpart was talking about, that his international business was through-the-roof.
So, bottomline: While we Americans might feel the pinch of a contracting U.S. economy or the dollar getting slammed, there’s no doubt that U.S. companies are benefiting more than ever from international activity.
It’s going to take some time for U.S. traders to understand there’s an increasing decoupling of the U.S. economy and the success of U.S.-based public companies.
Decades from now, I wonder what’s going to happen with that old phrase, "When America sneezes, the world catches cold"?
Must be how France felt last century watching the emergence of the U.S. market.
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