Global Stock Markets: In the Grip of the Bear

It's downright awful! That is almost all one can say about the performance numbers for measurement periods until September 30. As pointed out in a post at the beginning of the month, September, on average, has historically been the worst month. Moreover, the past month truly lived up to its reputation.

First off, something in lighter vein.

Source: Unknown

Losses occurred throughout as shown vividly by the performance tables being engulfed in red. The numbers speak for themselves, although a few observations are worthy of comment.

Emerging markets, in general, have underperformed mature markets over all measurement periods, and increasingly so since the peaks of May this year - so much for the expected decoupling of the stock markets of high-growth developing countries from those of the mature markets.

 

The Venezuelan Caracas Index bucked the trend and was the only index to deliver positive returns over the three- and six-year and YTD periods. Don’t hold your breath for nationalization doing the same for the U.S. and European stock markets!

In local currency terms, investors in the Toronto S&P/TSX 300 Composite Index (-22.0%) had the dubious honor of having registered the smallest loss since the various markets’ respective highs, followed by the Russell 2000 Index (-23.1%) and the Dow Jones Industrial Index (-23.4%). In dollar terms North America and Canada still fared relatively well, but were pipped at the post by the Swiss SPI Index (-21.4%).

On the deep red side of the scale, the Dublin ISEQ Index (64.4%), the Shanghai Composite index (-62.3%) and the Russian Trading System Index (-51.1%) have all seen investors’ money being halved.

Regarding the outlook for stock markets, David Fuller (Fullermoney) had the following to say:

We are entering a seasonally bullish period for equities. Yes, stock market indices are in overall downward trends and you can see big overhead top formations on the charts. However, the trends are also at least temporarily overextended and sentiment is at a bearish extreme. Therefore, the next significant move is likely to be a reversion to the mean, in the form of technical rallies towards the moving averages.

Caution remains key to investment decisions – there is no point in being brave at this juncture.

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Comments

[peterthepai...:]

amen to that..bounces up...probably...but...... pong ball goes down stairs...bounces up but continues down...p

2008 Oct 04 10:25 AM

[fanning:]

brought HXD.to and made some profit. Should have brought FXP even better.

2008 Oct 04 11:49 PM