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EM and Europe again took the brunt of global markets weakness yesterday with the Dax shedding 1.5% and US markets dropping for a fifth day in six, with the S&P dropping 0.8%, dragged down by tech shares and the Nasdaq (-1.2%) despite July US retail sales rising more than forecast. According to a BoA survey of international money managers published earlier this week, 67% of managers are now overweighed US markets, holding the belief that they are the best-looking house in a bad neighborhood. This is the largest proportion in 30 years. The rationale for the US markets outperformance (and outright divergence) and the resulting US overweight in international portfolios lies in a bullying President putting America first at the expense of everybody else and better growth numbers, themselves supported by tax cuts, profligate fiscal spending and buoyant equity markets that are themselves artificially supported by a record 1trn share buyback this year. That is no reason not to buy them the herd will say. Still, clouds are gathering above the US economic landscape that are more consistent with a peaking in US growth as well. The Turkish lira closed 5% higher yesterday, supported by Qatar 15bn investments promise in Turkey and after the central bank raised rates (by squeezing liquidity rather than hiking a base rate), also taking measures to reduce speculation in the FX forward markets. Commodities were a bloodbath yesterday on concerns that China’s, Turkey’s and much of the rest of EM weakness will translate into weaker global economic growth. Copper (which proverbially holds a PHD in economics for its ability to forecast economic weakness and recessions), shed another 3% yesterday with all base metals nursing similar losses. In absence of improvement in the US/Turkey diplomatic spat, EM currency weakness returned yesterday, led by South Africa and Mexico. European stocks opened sharply lower again as well. The Dax had been comparatively weak on Tuesday (even as US stocks enjoyed yet another squeeze), dragged down by a 7% decline in Bayer which took the full hit of Monsanto losing a lawsuit in the US that condemned the company to pay USD289mn in reparation to a farmer suffering from a cancer which the US court said was caused by Roundup. This farmer and all others suffering from a cancer caused by Roundup deserve every penny of reparation he/they will get but after all these years (Roundup has been known for causing cancer since years), it is likely no coincidence that the reparation was granted in US courts after Monsanto was bought by Bayer, a German company. Gold and silver were clubbed again, still failing to express their safe haven characteristics, This is a delayed and abbreviated version of our premium subscription-based report published ahead of the US and European session every day. 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