An argument has been made that investors are reacting to better economic news by worrying that better data brings the Fed closer to raising interest rates and fearing that it will mistakenly raise rates too soon.  We think this makes some sense as an explanation, but while we do  see rates rising in 2015, we believe the Yellen Fed will want to see clear signs of persistent economic strength.  Japan’s weakness is also policy related.  The consumption tax was raised on April 1^st and investors are clearly worried about the sustainability of the economic and earnings recovery.  We are currently overweight Japan, but we have a risk management plan in place.

David Fuller's view

Here is The Weekly View.

This week’s headline, ‘Cross Currents’ is certainly appropriate and several are discussed in this issue.