Stock markets continue to weaken

Stocks Mar09.jpg

The chart above represents a sad story, with all major stock markets now down at least 48% since their peaks in 2007/8. When the blog last reviewed performance in September, Shanghai had been the worst performer, down 69% from its October 2007 peak. Since then, it seems to have stabilised, with the market down 64% yesterday.

The other BRIC markets (Brazil, Russia, India) have continued their decline, and are now down 49%, 77% and 60% respectively, as exports collapse. Industrialised country markets have also seen further major declines, with the US S&P 500 now down 56%, similar to the loss on Germany’s DAX. Japan is down 61%, whilst the UK emerges as the ‘best’ performer, down ‘only’ 48%.

This confirms the blog’s fear, back in September, that we would see a second round of declines as the financial crisis evolved into a severe economic downturn. We will, no doubt, continue to see major bear market rallies as, for example, followed the Obama victory. But a sustained recovery will probably have to wait until earnings show signs of stabilising,

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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