Developed markets rose as 17 of 23 indices posted average weekly
gains of 0.4%. Larger developed markets outperformed their smaller peers
this week, as the best performing markets were Japan (+1.7%), Norway
(+1.6%), Germany (+1.2%), and the U.K. (+0.8%). The “PIIG” countries,
following healthy runs earlier in the year, have been underperforming
over the last month, as Ireland (-0.8%), Portugal (-1.1%), and Italy
(-0.5%) all ended the week
slightly lower. The Spanish market
appears to be more resilient and
ended the week up by 50 basis
points.
Emerging markets were flat for the week, declining 0.1%, on average,
across 21 indices. Ten markets posted gains, including Greece (+1.6%),
South Africa (+1.6%), and Mexico (+1.2%) which outperformed. Of
the eight countries with year-to-date gains over 10%, Greece (+11%),
South Africa (+11.1%), and Thailand (+13%) were the only ones to post
weekly and trailing four week gains, with average increases of 1.3%
and 6%, respectively. Weekly laggards included Egypt (-4.6%) and
China (-2.7%). The top five emerging countries year-to-date are Egypt
(+23%), India (+18.6%), Turkey (+15.9%), the Philippines (+14.3%),
and Indonesia (+13.4%).
Author: Kenley Scott
Kenley Scott is a senior equity analyst and sector strategist covering the APAC region and the Energy sector. He is a member of the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets. Kenley also writes the Global Sector Summary, part of the Sector Strategy service, which identifies emerging sector strength and weakness across 46 countries every week. After working as a commodities broker, Kenley joined the firm in July 2006. He has a B.S. in Statistics from the University of California, Riverside and also holds a Series 65 securities license.
North American Shale Hasn’t Lost Energy
Developed markets declined as 17 of 22 indices posted average weekly losses of 0.3%. Asian markets, which have been lagging this year, were among the better performing markets this week with Hong Kong and Japan ending the week higher by 1.6% and 0.1%, respectively. Hong Kong, which traded down by as much as 8.4% for the year back in March, is now up 0.1%, year-to-date. Portugal and Ireland were the worst performing markets this week, ending down 1.3% and 2.4%, respectively.
Developed Markets Gain, Emerging Mixed
Developed markets advanced 1.1%, on average, as 18 of 23 indices posted
weekly gains. Year-to-date-laggard Japan saw the strongest weekly gains
among the developed markets, rising 3.0%. Thirteen markets have touched 52-
week highs in the past two weeks, including nine European markets this week.
Developed Markets Gain, Emerging Mixed
Developed markets advanced 1%, on average, as 20 of 23 indices posted weekly
gains. Italy, Portugal, Austria, and Spain each gained more than 2%, leading the
way. Twelve of 16 European indices are 1% or less off 52-week highs, and of seven
markets outside Europe, five—including the U.S., Australia, and Canada—are also
within 1% of 52-week highs. Japan and Hong Kong, the two laggard developed
markets, managed a second week of gains, but they are still 8-10% off 52-week
highs. Larger markets, while lagging
for much of the year, are improving,
relatively:
India Under Heavy Accumlation
Developed markets continued to wedge higher for a fourth week, as 20 of the 23 developed markets posted average gains of 1.2%, while three markets pulled back 0.5% on average. The best-performing market this week was Ireland, which went into a correction last week, but found technical support near its 200-day moving average and rallied 4.3% for the week. Italy, New Zealand and the United Kingdom were the only markets to end the week with losses. The I-Shares Developed Market Index is now 1% off multi-year highs.
Emerging Markets Near Year-to-Date Highs
Twelve of 23 developed markets rose this week, led by a 3.9% gain in Hong
Kong, which had a follow-through day on Monday. Sweden and Switzerland
each gained about 2% and broke into multiyear highs. Ten other markets
are trading within 1% of 52-week highs, including the U.S., the U.K., France,
Germany, Australia, and Singapore.
Energy Sector Outperformance Persists
Fourteen of 23 developed markets pulled back an average of 0.56%, as selling pressure in high-growth names remains widespread. Among the weakest were the Asian markets of Hong Kong and Japan, which are down 1.8% for the week and 6.2% and 12.8% for the year, respectively. Portugal and Italy had the sharpest pullback this week, falling 3.1% and 2.2%, respectively, despite having the strongest year-to date performance among developed markets. Trailing four-week performance in developed European markets has been strong, with most European indices up an average of 2%. Norway has shown strong gains, up 8.5% over the last four weeks.
Consumer Staples and Basic Materials Improve Across EMEA
Nineteen of 23 developed markets rose this week, averaging about 1% gains. Norway,
Portugal, Germany, and the U.K. led with gains of over 2% each. Major U.S.
indices gained about 1%, with the Dow Jones Industrial Average and S&P 500
touching all-time highs.
Industrials Improving, Most Significantly in the Americas Region
Eighteen of 23 developed markets posted small weekly gains, rising an average of 0.40% over the prior week. The Scandinavian markets of Norway, Denmark, and Sweden outperformed their peers, posting weekly gains of 1.9% versus 0.5% for all 16 European markets. Hong Kong and Japan, which are the only two developed markets currently in a correction, continue to lag, falling 2.4% and 0.6% for the week and 4.6% and 11.4% year-to-date, respectively.
Several Countries Buck Global Sector Trends
Sixteen of 23 markets posted weekly gains, led by Japan (3.3%), and the U.S. (S&P 500-
2.9%). Even after the prior week’s losses, 14 developed markets still remain within 5% of
52-week highs, and several including the U.S., Canada, France, Australia, and Switzerland,
are within 2% of 52-week highs. Twenty markets remain in an uptrend, however, 15 of the
20 are under pressure with three or more distribution days in the past five weeks.
