2013 was ushered in three months ago amidst clouds of fiscal uncertainty in the US, economic slowdowns in Emerging Markets and misplaced austerity in most of Europe. As a result, most investors kept looking for safety in the coziness of Uncle Sam debt and other fixed income instruments. As it often happens, equities, especially in the United States, bucked the expectations and delivered a strong first Quarter performance. The upside surprise was a direct consequence of good absolute valuations, excellent relative valuation (to bonds) and a series of domestic economic numbers that have mostly surprised to the upside.
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