Percentage Below All-Time High of Popular Country ETFs (from bottom to top)
- Nigeria (NGE): -66%
- Turkey (TUR): -61%
- Russia (RSX): -56%
- Brazil (EWZ): -50%
- Italy (EWI): -41%
- Indonesia (EIDO): -26%
- China (FXI): -23%
- Spain (EWP): -23%
- South Korea (EWY): -16%
- Germany (EWG): -12%
- Japan (EWJ): -9%
- UK (EWU): -7%
- India (PIN) -5%
- Canada (EWC): -5%
- US (SPY): 0% (principally, at an all-time high)
Unsurprisingly, emerging markets are the ones that got hit the most. About half of the countries in the above list already witnessed their equity market moving into a bear territory (20%+ decline from the recent high)
Global Equity Returns YTD (based on the MSCI indices)
On a YTD basis the picture looks different, especially for a market like Russia that has seen its all-time-high few years ago. For Turkey and Greece (GREK), on the other hand, it's kinda same old.
Bond ETF Returns (from top to bottom)
- Invesco Senior Loan ETF (BKLN): +2.3%
- iShares iBoxx $ High Yield Corp Bd ETF (HYG): +1.7%
- iShares Floating Rate Bond ETF (FLOT): +1.6%
- Vanguard Total International Bond ETF (BNDX): +1.1%
- SPDR® Blmbg Barclays 1-3 Mth T-Bill ETF (BIL): +0.9%
- iShares 1-3 Year Treasury Bond ETF (SHY) : +0%
- iShares National Muni Bond ETF (MUB): -0.5%
- iShares TIPS Bond ETF (TIP): -0.7%
- iShares MBS ETF (MBB): -1.2%
- iShares 3-7 Year Treasury Bond ETF (IEI): -1.2%
- iShares CMBS ETF (CMBS): -1.3%
- iShares Core US Aggregate Bond ETF (AGG): -1.6%
- iShares 7-10 Year Treasury Bond ETF (IEF): -2.5%
- iShares iBoxx $ Invmt Grade Corp Bd ETF (LQD): -3.4%
- VanEck Vectors EM High Yield Bond ETF (HYEM): -4%
- iShares J.P. Morgan USD Em Mkts Bd ETF (EMB): -4.6%
- iShares 20+ Year Treasury Bond ETF (TLT): -4.9%
- VanEck Vectors J.P. Morgan EM LC Bd ETF (EMLC): -6.4%
- PIMCO 25+ Year Zero Coupon US Trs ETF (ZROZ): -7.3%
Note that the worst-performing segments are emerging markets (we'll get to those again) and the long-duration ETFs.
3-Month Treasury Bill Yield in August Since the Subprime Crisis
- Aug '09: 0.19%
- Aug '10: 0.15%
- Aug '11: 0.03%
- Aug '12: 0.11%
- Aug '13: 0.05%
- Aug '14: 0.03%
- Aug '15: 0.06%
- Aug '16: 0.29%
- Aug '17: 1.06%
- Aug '18: 2.06% (10-Year High)
With the Fed hiking 7 times already over the past two years, it's no surprise that the probability of an 8th Fed hike this coming September (from the current 1.75-2% to 2-2.25%) has moved to 96%, i.e. a certainty
Benchmark Rates of Central Banks Across the Globe
Philippines hikes rates for the 3rd time this year, in a +50 bps move to 4%, as inflation hits its highest level in 5 years.
Following many years of cuts-only, the global picture is now much more balanced with more central banks "daring" to hike. Nevertheless, there are still more banks that cut (on their last move) versus those that started to hike.
With the US reimposing sanctions over Russia, it's no surprise that the latest victim in the emerging markets' currencies arena is the Russian ruble
Emerging markets built imbalances counting on a weak dollar and eternal low rates and now the "sudden stop" domino is evident:
First it was the Argentinean peso...
Second was the Turkish lira...
Then joined the Brazilian real...
Followed by the Chinese yuan...
...and now it's the Russian ruble's turn:
Emerging Markets Currencies - MTD Performance
The Turkish lira ("TRY") and Russian ruble ("RUB") remain the most vulnerable currencies in the current environment of trade wars and new (or old that are reinstated) US sanctions
Putting it differently, can you guess which countries have been sanctioned most recently by the US?
Let's not forget the Iranian real ("IRR") which is not on the list but it's in our mind...
Market Cap of Top 20 Crypto-Currencies
It's ain't a rosy picture in here...
The market-cap of top 20 crypto-currencies at the end of 2017 was $512B. Today it's only $201B; that means a loss of $311B or -61%. Ouch!
It's no wonder then that the YTD returns of crypto-currencies are - how to put it nicely - not topping the list of "best performing assets in 2018"...
Even bitcoin (BTC-USD), the darling of 2017, has been cut by more than half its value.
Last but not least: SPDR® Gold Shares (GLD). Frankly, there's nothing to see here!
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