Saturday, June 21, 2008

A Worldwide Bear Market

While a great deal of attention has focused on U.S. stock market weakness (SPY), we're seeing just as much weakness among European equities, including the U.K. (EWU) and Germany (EWG). China (FXI) is leading the downside with Hong Kong, as inflation forces significant monetary tightening and a soft landing doesn't seem in the cards. Australia (EWA), a resource producer, has been relatively stronger, but the surprise in the bunch is Japan (EWJ), which has held up surprisingly well through the spike in energy and agricultural commodities and the weakness across Asia.

Clearly the picture is one of a worldwide bear market.


bzbtrader said...

Canada (EWC) doesn't seem to share these economic problems. Maybe some lessons to be learned there.

Roger said...

I wish you had also included Brazil in your comparison. After all, the BOVESPA volume is already close to 3% of all markets worldwide.

And frankly don't know what's the yearly result right now - it was growing pretty well until a few weeks ago, then it lost 11% (3% yesterday). It may still be positive, but I am just too lazy to look it up. :-)

Brett Steenbarger, Ph.D. said...

Great points about the more favorable returns among resource-rich countries. I posted a follow up to illustrate; thanks--