At the beginning of the post crisis recovery in the US, one of the things that helped lift us out of recession and into expansion again was the strength in our exports.
Opportunities were everywhere, including China and Europe. Now however, with Europe on the brink of recession (and some countries in the Eurozone already in recession), and a marked slowdown in China and other 'emerging' markets, our export market will not pack the same punch as it did just a few short years ago.
Fortunately, Canada's economy is gaining, and they are our largest export market. Mexico is next.
But China, Japan, the UK, and Germany, respectively, are our next largest export markets. Granted, the combined exports to Canada and Mexico is roughly 40% larger than the other four combined. But a slowdown in these areas will still be felt.
The question is, will the strength in Canada and Mexco, along with our rising domestic demand, be enough to overcome the slowdown in overseas markets? The answer to this will likely determine the fate of the US stock market in 2012?
Will the strength of the US and its closest neighbors be enough for a positive US stock market?