In front of crucial Nov PPI, CPI and FOMC, why is US equity market worse than Europe and Asia? Put-call surged 12/7-12/8, arguing favorable risk/reward into these reports.

Why is the US essentially the worst stock market in the world? With the weakest bounce?

Arguably, the US has best weathered the trifecta of global turmoil--global inflation, surging oil and China zero COVID--among any major nations. This is evidenced many ways but consider:

  • Fed has raised interest rates +400bp in 2022
  • yet, the US economy continues to produce solid real GDP growth and employment has held up
  • and inflation has been falling visibly

Yet, despite the obvious robustness of the US economy, the US equity market is among the worst performers YTD:

  • peak to trough, the US fell -28% and as shown, is the worst of any major nations except for those 3 Asian nations Hong Kong (-53%), China (-40%) and Korea (-36%).
  • and the US rise from the low is only +10% which is dwarfed by other nations including Germany which has surged +20%. Germany only fell -27% peak to trough, which is less than the US
The chart in this report is only accessible to members

RETRACEMENT: US only recovered 29% of decline, while Europe 45% to 77% retracement

This also puzzles me. This is looking at retracements, or what share of the decline has been recovered:

the US has only recovered 29% of the decline (10% recovery after a 28% decline)yet, other major nations have seen 45% to 77% retracements including Germany (54%), Japan (47%), UK (77%) and even Brazil (38%)to me, ...
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