Today John Hussman of Hussman Funds reiterates the tight correlation of world financial markets in our very global econony: See Fragile Conditions:
A final observation – given the extremely elevated and overbought condition of global stock markets, not just here in the U.S. but nearly everywhere, the combination of extended, uncorrected stock market advances and rising yield trends could invite a strikingly coordinated decline. Interest rates are already rising globally, and the U.S. trends are part of a broader picture. As I used to teach my international finance students, international diversification can be very useful over long periods of time – but it generally fails at precisely the point where it is most needed, because market declines tend to be globally coordinated. That's not a forecast, but it is useful to remember given the enthusiasm of investors for international investments at present. This could be an interesting few weeks.