Sunday, August 03, 2008
Shifting International Stock Market Regimes
Since July 15th, we've had a rally in U.S. equities, with the S&P 500 Index (SPY) up over 4%. Above we can see the performance of markets in other countries, including Germany (EWG); Hong Kong (EWH); Japan (EWJ); China (FXI); India (EPI); Russia (RSX); Brazil (EWZ); Canada (EWC); and Australia (EWA).
What we can see is that the rally has been most robust in the energy and resource consuming countries. We've actually seen declines since mid July in the energy and resource producing nations, as commodity markets have tumbled.
It's a great illustration of the linkages among global markets, with equity returns dominated by commodity-based inflation themes.