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Last week’s performance of the major asset classes is summarized in the chart below – a set of numbers indicating a rather mixed-up picture, reflecting investor sentiment vacillating between “risk-on” and “risk-off” trades. Notwithstanding a weak, or should I say “fatigued”, close, the S&P 500 Index and corporate bonds ended the week higher. On the other side of the performance spectrum, the U.S. dollar gained handsomely, triggering selling pressure for gold and other precious metals, oil and most other commodities. Emerging-market currencies also lost ground against the greenback.

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Considering a more comprehensive array of asset types (obtained from, red dominated the trading screens as shown below. The following a few interesting observations:

  • The tables were turned on the 2010 performance figures with some of the high flyers such as silver, palladium, grains, coffee and other commodities coming under selling pressure.

  • The Nikkei 225 Average – one of the big losers of 2010 – outperformed other major stock markets last week on the back of a declining Japanese yen.

  • U.S. small caps (as represented by the Russell 2000 Index) – another top performer of 2010 – underperformed large caps on the week.

Click here or on the table below for a larger image.


The performance of various global stock markets is given in the table below in local currency terms for different measurement terms ended January 7. The MSCI World Index (+0.1%) gained marginally, but in another reversal of the 2010 numbers the MSCI Emerging Markets Index (-0.4%) slipped somewhat.

India (-4.0%) was the big casualty among emerging markets as rising interest rates, higher inflation and governance issues impacted negatively on sentiment. Highly indebted countries such as Ireland, Portugal and Spain also ended the week in the red.

Despite solid gains since the March 2009 lows, the Tel Aviv 100 Index is the only one trading above its 2007 pre-crisis peak. Mexico and Chile could be the next countries to eliminate the bear market losses.

The gains still required in order to reach the 2007 bull market highs are: MSCI World 31.3%, MSCI Emerging Markets +16.7%, S&P 500 Index +23.1%, Dow Jones Industrial Index +21.3%, Nasdaq Composite Index +5.8% and Russell 200 Index +8.1%.

The bulk of the indices are in primary bull markets, trading above their 200-day moving averages, with the only exceptions being Ireland, Portugal and Spain. In addition to the debt-laden countries, two BRIC constituents – China and India – have fallen below their intermediate term 50-day averages.

Focusing on the S&P 500 Index, 81% of the 500 constituent stocks are trading above their 50-day moving averages (somewhat down from the 93% level reached in October), whereas 90% of the stocks are above the key 200-day lines.

Click here or on the table below for a larger image.

Considering a larger group of stock markets (via Emerginvest), top performers last week included Eastern European and African frontier markets such as Estonia (+9.6%), Uganda (+8.8%), Côte d’Ivoire (+8.2%), Nigeria (+5.7%), Romania (+4.7%) and Hungary (+4.6%). At the bottom end of the performance rankings, countries included Cyprus (-7.0%), Bangladesh (-6.5%), India (-4.0%), Spain (-3.0%), Colombia (-2.6%) and Taiwan (-2.5%).

Of the 90 stock markets I keep on my radar screen, 69% recorded gains, 27% showed losses and 4% remained unchanged.

Seven of the ten economic sectors of the S&P 500 closed higher for the week, with technology, healthcare and financials performing well. Consumer Staples, Telecoms and Minerals were the ones under water.

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Source: US Global Investors – Weekly Investor Alert, January 7, 2011.