While markets don't always move in tandem, there is usually a general correlation with respect to global markets as global economies are very interconnected. While some economies perform better than others and market returns will vary from one market to the next, it is interesting to observe the recent divergence over the past few months. While the US markets are moving higher, the markets in the fastest growing global economies are moving lower. The markets could be saying something or it could be nothing, but an interesting development none the less.
Friday, February 4, 2011
Global Markets Diverging
Below is a graph of the S&P 500 Index, along with a China Index, India Index, Brazil Index, and Emerging Market Index. At the very top of the chart is the S&P 500 Index; the blue line represents emerging markets; the brown line represents Brazil; the orange line represents China; and the reddish line India. The right scale is the percentage return over the past three months.
While markets don't always move in tandem, there is usually a general correlation with respect to global markets as global economies are very interconnected. While some economies perform better than others and market returns will vary from one market to the next, it is interesting to observe the recent divergence over the past few months. While the US markets are moving higher, the markets in the fastest growing global economies are moving lower. The markets could be saying something or it could be nothing, but an interesting development none the less.
While markets don't always move in tandem, there is usually a general correlation with respect to global markets as global economies are very interconnected. While some economies perform better than others and market returns will vary from one market to the next, it is interesting to observe the recent divergence over the past few months. While the US markets are moving higher, the markets in the fastest growing global economies are moving lower. The markets could be saying something or it could be nothing, but an interesting development none the less.
