U.S. Decouples From Global Markets - in Reverse

Below we highlight the year to date returns of the major equity indices for a number of key countries. Using prices from this morning (before the U.S. market opened), the United States' S&P 500 and Dow 30 are down much less than the rest of the countries analyzed. China is down 27.7%, India is down 24.6%, Hong Kong is down 24% and Germany is down 21.7%.

Leading up to the peak in global equity markets last year, many people thought that countries were finally strong enough to decouple from the US and perform well even if the US went down the tubes. These days, however, the US is the one doing the decoupling to the upside.

click to enlarge

Comments

[andrewpmk:]

Don't forget Canada. It's down only 6.1% YTD. High oil and gold have buoyed Canadian stocks recently.

2008 Mar 24 06:55 PM

[damienhaas:]

How about the gain in Euro/Swiss/GBP for Dow and S&P?

2008 Mar 24 07:30 PM

[User 142738:]

The pound sterling is falling faster than the dollar, but thank you for playing.

2008 Mar 24 08:51 PM

[GKM:]

So you pick an arbitrary date and compare the US indexes to ones that rose higher and didn't fall as quickly and this is supposed to instructive of something? I suppose if you are getting paid by the word....

2008 Mar 25 12:04 AM

[xander:]

useful report

2008 Mar 25 03:27 AM

[Robster:]

this is elementary (and normally i respect much of bespoke's work). When we talk of decoupling we are talking about countries' actual economies. Stock returns don't provide a 100% accurate picture of a country's economy but in fact GDP is the better measure that should be used. With US GDP growth down to 0.6%, China's still strong at 11.2%, over 8% for India, 7% Malaysia and around 8% in Russia, i think we can see a decoupling occuring. The notion of this article should be changed if you are alluding to stock market returns decoupling. I would have expected the learned bespoke fellas to have distinguished that.

2008 Mar 25 09:13 AM

[Fabien Hug:]

There is decoupling, these figures are inversely proportional to the amount of government's cash injection into the economy. If China starts to sell its us t/bonds and inject them into its economy... you know the drill.

2008 Mar 25 10:09 AM