The S&P 500 is down 2.67% year-to-date (YTD). Within the index some sectors such as financials, energy, industrials, telecom services are down more than 10%. The IT sector components are up nearly 20%. Among the international stock indices, some indices are up significantly so far this year.
The stock indices that are up by more than 10% YTD are:
- Sao Paulo Bovespa (Brazil) - 31.1%
- Caracas General (Venezuela) - 27.4%
- Tel Aviv (Israel) - 30.1%
- SX All Share (Sweden) - 16.4%
- Shanghai Composite (China) - 71.0%
- Hang Seng (Hong Kong) - 23.1%
- Bombay Sensex (India) - 40.0%
- Straits Times (Singapore) - 31.0%
- Kospi (South Korea) - 27.0%
- Weighted (Taiwan) - 47.5%
Source: WSJ Market Data Group
The Shanghai Composite Index is the top-performing index. The emerging markets of China, Brazil and India are showing strength while the developed market indices are performing poorly. Like the S&P 500, the CAC 40 (France), FTSE 100 (UK) and DAX (Germany) are also down under 10% .
Despite being heavily dependent on contract manufacturing of electronic products, Taiwan is up nearly 50% YTD. This could be due to the strong demand for electronic items such as semiconductor chips, computer peripherals from emerging markets. The makers of these products such as Cisco Systems (CSCO), Broadcom Inc (BRCM), Advanced Micro Devices (AMD), Apple Inc (AAPL), Dell Inc (DELL), etc. are benefiting nicely from overseas demand.
Incidentally these stocks were once hi-fliers during the dot com boom but had fallen hard after the dot com collapse. Due to the strong performance of the IT sector companies, the IT components in the S&P 500 are up 19.70% while the overall index is down. Singapore also has a growing electronic components industry. But most of the economy is dependent on global trade. As global trade returns to normal levels Singapore's economy will benefit.
Emerging markets and select developed markets are likely to be the winners by the end of the year based on their performance YTD. The performance of the emerging markets suggests that they are becoming less dependent on exports to the developed world and are relying more on the domestic economy.