Individual Stocks highlight divergence of Economies

by Laura Ehrenberg-Chesler on March 7, 2013

in Economic Indicators,Foreign Markets,Investment Strategies,United States of America

A recent “Wall Street Journal” article highlighted an interesting divergence in the price performance of companies that are dependent on the U.S. economy versus some economies overseas.

A great comparison was made between Yum Brands and Home Depot.

Yum Brands has a large exposure to the Chinese economy, and its share price is up 4% over the past year.  U.S. focused Home Depot has seen its share price climb 48% in the same period.

This divergence is worth noting for two reasons.  First, it may inform an investors’ decision with regard to buying companies with a lot of exposure outside the United States.  Perhaps more importantly, it may effect the potency and longevity of our own recovery.  Economies overseas may improve, or stay stagnant.  Either way, it bears watching.

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