Global Returns: Stocks Down, Bonds Down

Below we highlight the year-to-date changes of major equity indices and ten-year government bond yields for a number of countries. As shown, the majority of equity indices are down, while the majority of bond yields are up (bond prices down). Across the globe, stocks and bonds haven't really worked this year, as the money has all flowed into commodities.

China's Shanghai Composite is still by far the worst performing index at -45%. China is followed by India, Hong Kong, Italy, France and Germany. The US has held up relatively well, ranking 6th out of 21 countries analyzed in terms of market performance. Mexico, Brazil, Canada and South Africa are the only countries with positive stock market returns.

Bond yields have risen the most in Singapore, where the 10-year government bond rate has gone up 47% in 2008. South Africa, Japan, the UK and Switzerland trail Singapore with the highest rises in yields. Again, the US hasn't done poorly when compared to other countries. With yields up just 6% this year, government bonds here haven't gotten hit nearly as hard as elsewhere.

Comments

[Nidhi Kadalbal:]

Interesting. Makes you think if there are any "Brussia" ETFs .. that is BRIC without China or India .. ;)

2008 Jun 15 07:44 PM

[James Lewis:]

Trading Russia/Brazil is the same as trading commodities.
If commodities carry on their rise or stabilise then Brussia is the way foreward. You start getting a drop in oil etc, then China is the market to be in.

Shortly we will start to see PE ratios in the region of 13-15 in some stocks in China. That suggest that China will improve its dismal performace, we just need the market to capitluate.

2008 Jun 15 08:41 PM

[User 143167:]

You should also add the currency depreciation/appreciat... into the chart. Compare index returns without that is meaningless. You will reconsider South Africa market as a winner if you look at the dismal performance of its currency as of late.

2008 Jun 15 09:37 PM

[Nick Gogerty:]

Indicating wether the currency factor was local or converted back to dollars would be helpful. Otherwise, put it all in Zimbabwe for mega returns....ex currency mises.org/story/2532

2008 Jun 16 11:17 AM