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Thursday, November 13, 2014

Macro & Micro Views of World Markets, Commodities, & Currencies

I'm showing a comparison, in graph format, of the percentages gained/lost of a variety of world market indices, commodities, currencies, and U.S. ETFs.

The first graph in each category shows the percentages gained/lost from March 2, 2009 to November 13, 2014.

The second graph in each category shows the percentages gained/lost Year-to-Date.

U.S. Major Indices




9 Major U.S. Sectors + Homebuilders ETF




Germany, France + PIIGS




Emerging Markets + BRIC Countries




Canada, Japan, UK, Australia + World Index




Commodities




Currencies




Commodities, Lumber, Homebuilders, USD + U.S. Bonds




OBSERVATIONS:
  • Transportation and Utilities are favourites this year, while Small-Caps are flat for the year (but remain strong from the beginning of March 2009).
  • The "defensive" sectors are more in favour this year, while Energy and Homebuilders have lost ground.
  • Although most of Europe is under water for this year, Germany and Ireland still hold substantial gains from the beginning of March 2009...Greece is the weak link in this group.
  • Although Russia is under water for this year, it still holds a fair amount of gains from March of 2009, while emerging markets are flat for the year...and China has finally made some gains for the year.
  • Although a substantial amount of profit-taking has occurred in the UK, Australia and overall World markets, their gains are still substantial from March, 2009...although Japan is leading in this category from the beginning of March 2009, its gains have slowed for this year.
  • The only commodity that has made any gains for this year is the Agricultural ETF...although WTIC crude oil and Brent crude oil have taken substantial losses this year, they still hold substantial gains from the beginning of March, 2009.
  • The only currency to have made any gains for this year is the U.S. $, but it remains flat from the beginning of March, 2009, as does the Euro, while the Aussie $ remains in the lead.
  • The Homebuilders ETF and Lumber have certainly outpaced the gains from the beginning of March 2009 when compared with Commodities, U.S. Bonds, and the U.S. $...meanwhile, U.S. Bonds and the U.S. $ have been favoured this year.

CONCLUSIONS:

I'd say that, unless confidence returns in the housing sector, along with Lumber and Copper, as well as Small-Caps and the "riskier" sectors, we'll see reduced rates of returns in any continued bull market in the U.S. as it remains in a "tentative and "defensive" mode, or we may even see a substantial market slump until these markets can prove that a meaningful sustainability is possible (without support from the Fed). In any event, these categories may remain subdued or choppy until other world markets (Europe, Japan, Brazil, and China), including commodities, pick up.