Rising geopolitical stress over the evolving Ukraine crisis has taken a bite out of bullish sentiment lately. With this weekend’s secession referendum scheduled in Crimea, the crowd is again looking for safety. As a result, the risk-off trade is weighing on stocks. US equities are still in the lead among the major asset classes, based on our standard set of ETF proxies via a 250-trading-day window (the rough equivalent of 1-year returns). But the performance edge has been noticeably squeezed since the previous update in late-February. Meanwhile, emerging market assets remain at the bottom of the return ledger, albeit with a degree of red ink that’s more or less unchanged from the last time we crunched the numbers.
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