Forget the Fed's so-called taper. Forget Yellen. What matters most is Syria.
World stock markets logged a definite bottom on Aug. 27, just three days before President Obama changed his stance on Syria and announced he would seek congressional approval for action against the country.
So, for all the hand-wringing over changes at the Fed, Syria has had the dominant effect on the MSCI World Index -- both on the way down, starting in July, and on the way up, since Aug. 27. The countries that have responded most positively to the reduced likelihood of military action, Israel and Russia, are also intriguing.
Blog readers will recall the Insight & Action post on Sept. 11, comparing oil and defense stocks with the dollar, gold and bonds. Today we have another take on where investors allocate capital when switching to risk-on mode.
Both Israel and Russia have their own versions of the Dow Industrial Average, the TA-25 and MICEX, respectively. Also note how easily investors can participate in these global markets through exchange traded funds, EIS for Israel and RCX for Russia.
Here are charts of the two indexes: notably, more than 30 percent earnings growth in each of them dwarfs the 6 percent growth rate in the U.S., per the 18 strategists tracked by Bloomberg. Besides, they have higher dividend yields and cheaper valuations.
They are riskier bets to be sure, but they're priced accordingly.