Markets Week Ahead: Dow Jones, US Dollar, Gold Prices, Fed, Sentiment. The Dow is the most heavily traded of the five main indices (Standard & Poor’s 500, Russell 1000, FTSE 100, NASDAQ etc), and its performance is a good indicator of the health of the US economy. And as one of the better indicators of the health of the US economy, I think it is a good indicator of sentiment and confidence, but what about the European Union?
Despite James Jones’ popularity with the Dow, Europe is still ignored by the Dow itself. In fact, since we haven’t seen any losses in the Dow, we should be looking elsewhere for protection in case of a worst case scenario.
Indeed, Jones and his predecessors haven’t been too keen on showing his face when it comes to Europe, and if he had taken a lot more interest in Europe, and specifically in the periphery countries of Europe, he would have seen the need to widen his knowledge base. But it’s not just the Dow that shows the correlation between America and Europe, but also to some extent, Japan. It would appear that Japan is the strong leader in the Asia Pacific.
Then, of course, we see that Jones was the pioneer in the development of such indices as the Dow. Perhaps he should have made it much more global.
Nevertheless, we can look at the relationships between James Jones and the world economic map. It is interesting to see how close Japan, Germany, and America are to each other on the map.
When you stop and look at the pattern of real GDP growth, the positive relationship between the Dow and the Japanese economy has probably never been stronger than it is now. Thus, it makes sense that the Dow is beginning to rise quite strongly as well.
In fact, what a discussion of the world political landscape between Jones and his disciples might yield is a combination of light and dark, and a lasting analysis of the connections between Jones and the European Union. Europe is a strong contender for next time, at least.
But back to James Jones, he has achieved great fame with his charts and it was that popularity which has prompted him to broaden his attention and try to include other countries. Indeed, his charts are certainly broader than the chart that he popularized with his predecessor in order to show American/European/Japanese relationships.
But Jones’ popularity has extended far beyond the world economic map, and for that reason, he has discovered another emerging market: India. It is strange that Asia’s second largest economy has not yet been included in the Dow, even though its stocks are being sold like hot cakes.
So while Jones continues to popularize his world map chart, one can find much evidence that the Dow has moved very rapidly away from the United States, but this does not mean that the United States has completely left the map. Indeed, Jones has moved north into Canada, which is now showing signs of re-emergence on the map.
Perhaps Jones will soon discover China, since the Chinese market shows the biggest growth in market capitalization since he got started. Indeed, to take a slightly different direction, perhaps Jones will move back into Europe.
Indeed, if I were Jones, I’d be very interested in knowing whether China, India, or Brazil leads the world in stock market growth, and this could give him an opportunity to make some more money. And perhaps, if Jones wishes to make money on an international scale, he may be in luck again.