The US markets are looking solid. Consumer sentiment continues to push upward. The Conference Board Leading Economic Index rose 0.2% in May. The job market is tight. Credit is still expanding and the fundamentals are sound for US stocks to continue their rise upward.
Emerging markets are struggling. This is primarily due to a rapidly rising dollar due to repatriation of US firms from oversea funds. Additionally, US interest rates are rising and higher than other parts of the developed world. This will attract savers to dollar-denominated assets. Trade war headlines also seem to push up the dollar. This is the wrong interpretation by market participates. Trade wars are all about shrinking supply of given goods. The strong dollar will make emerging markets unattractive for the time being.
Europe and the ECB are struggling to “normalize” monetary policy. They have given signals that the negative interest environment will last into 2019.