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With US volatility on the upswing, take a look at Asia

Russ Koesterich, CFA of BlackRock

With US volatility on the upswing, take a look at Asia (Part 1 of 5)

While the U.S. economy appears to be gaining steam, lofty stock prices and rising geopolitical risks are finally taking a toll. Russ discusses one area that still represents an opportunity: Asia, both developed and emerging.

Although the U.S. economic recovery appears to be gaining steam, lofty stock prices and rising geopolitical risks are finally taking a toll.

Market Realist – The graph above shows the performance of the S&P 500 this year. As you can see above, the index experienced a rout of sorts last week and ended the week down 2.69% at 1,925. The one-day percentage drop was the highest since April 2014, as is clear in the chart.

The week ending August 1, 2014, was a tumultuous one for U.S. markets. The S&P 500 (SPY) fell 2% to 1,930.67 on July 31, 2014, which marked its sharpest one-day percentage decline since April 10, 2014.

The S&P 500 (IVV) had fallen 1.5% in July. This was its first monthly drop this year after January. The S&P 500 experienced its worst weekly loss since June 2012, ending the week down 2.69% at 1,925.

All ten sectors were in the red on Thursday, with energy (XLE) and telecom being the worst performers.

The Dow Jones Industrial Average Index wiped off all its gains of this year by plummeting a sharp 316.99 points (1.9%) to 16,563.37 on July 31, 2014. The Dow is now giving -0.1% returns in 2014. The tech-heavy NASDAQ too dropped 2.18% last week to end at 4,353.

U.S. Treasuries (TLT) too experienced a fall in prices in the last week. Ten-year Treasury (IEF) prices fell with a corresponding increase in yields from 2.46% to 2.5% in the week.

Read on to the next part of this series to learn more about the strong uptrend in volatility as U.S. markets fall.

Continue to Part 2

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