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Who will rescue the US stockmarket?

Financial Adviser's picture
Submitted by Financial Adviser on Tue, 12/13/2011 - 02:45

Who will help Europe and US to get back on their feet?

YTD Performance (rebased to USD) for major global equity indices:

  • The Dow is not going anywere in the last 2 months as every other index is showing lower highs and trending notably lower.
  • Euro Stoxx 50 is -18% YTD with Germany outperforming after Merkel's comments of possible exist and Italy underperforming as Berlusconi resigned and the new parliamnet struggles to agree on the policy (it is basically the same performance whether expressed in $'s or Euro's since YTD the FX rate is basically unchanged).
  • Outside of the Euro users, the UK is down 7% with the Prime Minister looking at breaking away from the euro zone bailouts and focusing on own economic issues
  • Switzerland is down 10%  (again the FX rate versus $'s is finishing very close to unchanged on the year) with the Swiss national Bank loosing billions pegging SFr to euro plus selling the gold, cantons not very happy.
  • Russia, controlled by Pution and names as a possible "savior" of Europe, is down 20% looking at RTS and is slightly worse when adjusted for FX moves.  The government is issuing Kalashnikov Gold backed bonds and buying the bullion in the past quarter to prop up the reserves.  Easy to do as the oil prices are up and the gas is pumping helping the rest of the Europe to stay warm in this freezing winter.
  • Central Europe - Austrla, Hungary and Croatia struggling with the rise of swiss franc as they borrowed heavily.
  • Ukraine - is trying to find the money to pay for the next coupon and has a high chance of defaulting after the last similar occassion when the Treasury stopped pensions and transfer payments to scape up the money due.
  • Sweden, Latvia are experiencing the beginning of a bank run and have no liquidity to spare
  • Canada-  stockmarket is down 11% in CAD and 14% when converted to USD.  
  • Argentina is down 27% in local currency and 32% in USD.  
  • Brazil, a potential "savior" of Europe, it is down 17% in local currency terms, and 24% in USD.  Recent slowdown in China and subsequent drop in steel and iron ore raises a question how far the decline could go.
  • Japan is down 15% for the year, though with currency appreciation it is only down 12% for the year in USD terms.  
  • In Hong Kong (white China) the Hang Seng is down almost 20% on the year.  The CSI 300 index (red China) is down about the same (which seems strange for another "savior" country to be down by so much).
  • South Korea and Australia are both turning in -10% returns in USD terms for the year.
  • India, down 22% in local currency terms and a whopping 35% in USD terms.