Rising Inflation, Events in Egypt: Another Down Week for Global Markets

by: MyPlanIQ

Global markets have had another downward week. With emerging nations under pressure from rising inflation and established nations rattled by the events in Egypt -- wondering whether it will spread and cause further disruption -- most nations were down again.

There were some notable exceptions but, in general, it was another round of declines.

Assets Class Symbols 01/28






South Korea EWY 14.73% 13.26% ^
Taiwan EWT 13.44% 13.81% v
Russia RSX 12.03% 13.65% v
Germany EWG 10.63% 9.86% ^
Hong Kong EWH 10.48% 12.42% v
Canada EWC 10.15% 9.74% ^
Mexico EWW 9.53% 11.83% v
Malaysia EWM 9.23% 13.09% v
Austria EWO 9.06% 9.66% v
Singapore EWS 7.72% 8.04% v
Switzerland EWL 7.62% 6.7% ^
Japan EWJ 6.63% 5.98% ^
Australia EWA 5.43% 5.09% ^
France EWQ 5.3% 6.28% v
United Kingdom EWU 4.83% 6.17% v
The Netherlands EWN 4.27% 6.06% v
Italy EWI 3.2% 5.62% v
Belgium EWK 1.83% 3.34% v
South Africa EZA 1.5% 6.05% v
Spain EWP 0.47% 2.99% v
Brazil EWZ -0.02% 2.87% v
China FXI -0.06% 1.62% v
India INP -4.99% -0.2% v

The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).

click to enlarge images

South Korea returns to its top spot being alone with Germany having a positive trend in the top five.

Whereas there is concern that the Egyptian protests will spread to other emerging nations who are riddled with corruption, South Korea has almost annual protests which are known and priced in.

There is increasing sentiment that the emerging nations are going to have to battle with inflation and rising currencies while the established nations look increasingly attractive with a skilled workforce, favorable exchange rates and government backing. In the long term, the emerging markets will continue to rise but they also want to the established economies see increasing employment and lower debt.

Germany is one of the established nations that is seeing unemployment at its lowest levels since reunification -- there is a concern about the lack of skilled labor

At the bottom of the pile, there is little cause for optimism. While India, China and Brazil are going to be good bets in the long term, currency and fiscal woes push them out of favor for now. Spain is still mired in debt and South Africa is impacted by what is happening in the northern part of the continent.

We will have to watch whether the unrest spreads and what impact that has on national confidence.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.