By Eric Bush, CFA
The average stock in the developed world is off 23% from its 1-year high and is down 8% over the past year. 52% of all developed world stocks are in a bear market over the past 200-days (i.e. down 20% from the 200-day high). During the worst of the 2011 drawdown, 65% of stocks were in a bear market.
Not a single sector has avoided falling into a correction over the past year. The classic defensive sectors have once again performed better on a relative basis. The average consumer staples company is 12% off its 1-year high, the average utility company is 13% off its 1-year high, and the average telecom company is 18% of its 1-year high. Energy stocks continue to be the dog in the market as the average energy company is down an astounding 40% of its 1-year high. Materials (down 28%), financials (down 24%) and tech (down 24%) are following energy lower.
From a regional perspective, the drawdown has been pretty uniform. The average stock in DM Americas is off 24% from its 1-year high, the average stock in DM Asia is off 21% and the average stock in DM Europe is off 23%. However, if one looks at the average performance over the past year, DM Asia is outshining the other region. The average stock in DM Asia is only down 1% while the average stock in DM Europe is down 9% and the average stock is down 14%. The average stock in DM Americas is down over the past year than it has been at any time since September 2009.