Easing Money

 | Mar 08, 2013 | 12:00 PM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

FXI

,

ewj

,

ewj

,

dxj

,

spy

This commentary originally appeared at March 8 on Real Money Pro -- for access to all of legendary hedge fund manager Doug Kass's strategies and commentaries, click here.

There is the view this morning, expressed by several strategists on CNBC's "Squawk Box," that the current global stock market advance is based on more than just quantitative easing and excessively liberal monetary policy.

It is less clear to me, and here is some evidence.

Countries' stock markets that are undergoing quantitative easing are materially outperforming those that are not delivering quantitative easing.

Let's examine two stock markets and look at the major differences in performance:

  • China -- via iShares FTSE/Xinhua China 25 Index Fund (FXI) -- is the only major region not doing quantitative easing.
  • Japan -- via iShares MSCI Japan Index Fund (EWJ) -- is undergoing substantial easing. And if one looks at the WisdomTree Japan Hedged Equity Fund (DXJ) for Japan, which takes out the currency exposure and is not depressed by the yen weakness as EWJ is, it makes my point even more.

Now, let's compare the stock market performance of China (again, via FXI) with the U.S. stock market -- via SPDR S&P 500 ETF Trust (SPY) -- which is also engaged in quantitative easing. The same relationship of underperformance exists.

Columnist Conversations

Bloomberg reports this morning that 25 banks in the eurozone are set to fail the ECB's stress tests.  App...
Globex update... Overnight inventory is nearly 100% short, so should supply evaporate at the open and buyers b...
Market looks to open flat as Ebola is back in the news with a new case in NYC and the first case in Mali. Some...
Amazon (AMZN) and others offering 'free shipping' on relatively small orders are finding they often lose money...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.