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Global Stock Markets Roundup


Be cautious and wait for markets to realign with reality.


The performance of a number of global stock markets is given in the table below in local currency terms for different measurement terms ended August 31. The numbers speak for themselves, but it's noteworthy that the MSCI World Index (+3.9%) and MSCI Emerging Markets Index (-0.2%) followed separate paths in August as China, Hong Kong, and India underperformed.

Top performers during August included Austria (+11.3%), Ireland (+10.9%), and Venezuela (+10.6%). At the bottom end of the performance rankings, countries included China (-21.8%), Hong Kong (-4.1%), and India (0%).

The key moving-average levels are also given in the table above. With the exception of the Chinese Shanghai Composite Index, which fell below its 50-day moving average about two weeks ago, all the indices are trading above their respective 50- and 200-day moving averages. The 50-day lines are also in all instances above the 200-day lines.

The gains/declines mentioned above are all in local currency terms. However, converting the movements to US dollar shows a better picture, in general, for the non-dollar countries (see table below).

As mentioned in my post yesterday, The Shanghai Cracks,

"I suspect we may see at least some degree of reversion to the 200-day moving averages in a number of instances, but I'll be watching closely to ascertain whether we're dealing with a normal short-term correction or a more significant move threatening the primary trend. In the meantime, sit tight and be cautious as markets hopefully realign with the reality on the ground."

No positions in stocks mentioned.
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