According to the most recent data available, the IMF estimates that central banks around the world shifted quite a few of their reserves out of the euro in Q2.
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In the table below, we show the percent of companies from each country that are outperforming the MSCI World Index. While 62% of Hong Kong, US and Danish companies are outperforming, only 7% of the companies in Germany and Sweden are outperforming. What is causing such a divergent performance among the developed world countries?
Read MoreIt was only a few months back when we began feverishly highlighting here, here, here, here, here, and here how volatility in many markets was at or near generational lows and that any move to return to the mean would be disruptive.
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One of our favorite grounding exercises is to peruse our chart library and review what has happened in the global financial markets so we can opine about what those prices and patterns are telling us about the world. We’ll save the opining for another time, so we present the following charts with little commentary.
Read MoreThe availability of credit for U.K.
Read MoreYesterday, most of the European equity markets migrated to a trade date plus two (T+2) settlement cycle, with the exception of Spain, which is slated to adopt the change in Q4 2015, and Germany which has already been settling trades at T+2 for several years. As an aside, the US remains at T+3. The Central
Read MoreEach day we recalculate and rank the significance each of 30 factors has played to individual stock performance over various rolling periods. In this way we can get a better idea of the qualities of individual stocks the market is favoring and shunning, and this helps us put the puzzle pieces together.
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While many of the headline indices, such as the S&P 500, are still within sniffing distance of all-time highs, there is turmoil underneath the surface of the world equity markets. The MSCI World Index is higher by about 9% year-over-year.
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It seems we are getting daily validation on why we should avoid European cyclical stocks. Yesterday the European retail PMI and Sentix Economic Index for the Euro Area undershot expectations (see Today’s Data Not Good For European Cylicals). Today Germany reports that industrial production suffered another severe drop.
Read MoreFor about 15 days between the end of August and mid-September the action in the treasury bond market deviated from our model comparing bond yields to the change in the size of the Fed’s balance sheet.
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At least 75% of all stocks in each MSCI World sector have seen sales and earnings estimates fall over the past month. Only 10% of industrial stocks have had an increase in sales estimates over the past month and only 16% of industrial stocks have had an increase in earnings estimates.
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We’ve recently highlighted how European cyclical stocks are struggling (see Cyclicals Gone Bust, It’s Been a Tough Year to Pick European Stocks and Getting Tougher in Asia , Beware European Cyclicals). Today’s economic data out of Europe gives us more to worry about when looking at European cyclicals.
Read MoreData released today revealed a jump in both bankruptcies and forced property sales in Denmark: Why do we care?
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In June (here) and again last month (here), we noted a curious divergence in two series that have historically moved together– the EUR/USD exchange rate and the interest rate differential between the respective 2-year OISs.
Read MoreGaveKal Capital’s Bryce Coward examines Q3 global stocks data, his analysis suggesting that a cautionary stance toward stocks may be indicated. Health care was the only sector in which an investor had a better than even chance of picking a winner.
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