I implied recently that the debt ceiling debate may be putting a ceiling on the market, and that when the ceiling’s lifted stocks could rally… And for about 40 minutes Monday morning, that was looking like the case… However, as the market peaked its head out it saw weak GDP growth, a weak ISM reading and weak consumer spending… I.e., the market is no longer worried about our ability to pay our obligations but rather about our ability to grow…

In my recent column Time to Worry? I said that if the debt ceiling debate doesn’t give us that overdue 10% correction, I’d begin to worry… As I type the Dow’s off 200+, which would put it roughly 400 points above that 10% (from this year’s peak) decline mark… Always keep in mind; a 10% market decline can’t occur without a significant decline in sentiment. I.e., things get really ugly on average once a year…

Here’s the thing folks, short-term, it’s all about traders’ focus… When they’ve focused (of late) on earnings, profit margins, balance sheets and prospects they’ve bid stocks higher… When they’ve focused on leading economic indicators, they’ve bid them lower… The question is, looking forward, can corporate fundamentals stay so positive if the economy slows? The answer; of course not (generally speaking)… but it’s not all about the U.S. economy…

Think about it; how is it that the U.S. economy has been barely crawling out of the last recession and the likes of Google, Apple and IBM say earnings have never been better? Two things: It speaks to the fact that smart people are forever looking to gain efficiencies, and it speaks to the growth in overseas markets… 66% of IBM’s*, 56% of Apple’s** and 50% of Google’s* earnings come from foreign markets, particularly emerging markets… Here’s the bottom line:

*Emerging/frontier markets account for: