After last week's market actions, here are some of the trends that we've taken note of:
- Markets continue to churn into the Fall season. The World (MSCI ACWI) was down 3.4% last week. Values abound in the stock market, but the value is a direct result of the volatility. Stocks are not worth the risk for many people after the last 10 years of moving sideways. Yet, long-term holders will be rewarded.
- Italy and Germany are both down over 25% year-to-date. Also, France and the UK are down about 19% and 10%, respectively, year-to-date. The US is the leader of the developed countries at this point. Emerging Markets are increasingly becoming less volatile than in the past in relation to developed countries. One must consider more reasonable allocations around the world than the EAFE most managers follow.
- Financials are down over 23% year-to-date, and Industrials and Basic Materials are both down over 13% so far this year. However, most other sectors are holding up reasonably well in this downturn.
- Looking at the major asset classes, International Stocks have turned negative over the 1 year time frame. Just take a look at the graph below.
Click image to view larger graph. Data source: Thomson Reuters Datastream
Click here to view today's full World Wrap report.
Keith Hays & Justin Wood
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