Global stock markets reverse previous losses

Stocks Mar12.pngThe blog’s 6-monthly review of major stock markets highlights their continuing volatility.

Last September, all the markets were down between 7% – 22%. Germany (dark green column) was the biggest loser, whilst the UK/US (blue, red) were least impacted. Only the US 30-year Treasury bond (light green) had increased, as US interest rates fell.

Please click here if you would like to compare with that chart.

Today, all the major markets have risen between 5%-25%, with the exception of China (light blue):

Germany is the biggest winner, up 25% since September
• It is still just below its level in March 2011
China is the main loser, down 1% vs September and 17% vs March
• The US/UK are up 13%/11%, and 5%/2% vs March
Brazil (pink) is up 16%, and equal to March
Japan (purple) is up 12%, but down 5% vs March
India (orange) is up 5%, but down 3% vs March
Russia (lilac) is up 9%, but down 11% vs March

Only one market has increased in both 6 month periods. This is the US Treasury 30 year bond. It was up 14% vs September, and 28% vs March.

This highlights the major risk to the current euphoria. Stock market investors, led by the high frequency traders, continue to chase momentum – up and down.

But bond markets investors continue to focus on return of capital. Thus the US Treasury bond markets, and those of the other JUUGS, retain fundamental strength.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. 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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