Breaking News
Investing Pro 0
🚨 NDVA surged 43%. This AI Chipmaker Could Be Next See Analysis

Rebound In Global Markets Turned Mixed Last Week

By James PicernoMarket OverviewNov 07, 2022 14:46
ng.investing.com/analysis/rebound-in-global-markets-turned-mixed-last-week-138414
Rebound In Global Markets Turned Mixed Last Week
By James Picerno   |  Nov 07, 2022 14:46
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
VTI
+1.65%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TIP
-0.49%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MCHI
+2.66%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
VT
+1.56%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
VWO
+1.59%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GCC
+0.65%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

The recent rally in global markets thinned out last week as commodities and foreign stocks rose while U.S. assets retreated, based on a set of ETF proxies.

Stocks in emerging markets posted the leading performance for the major asset classes in the trading week through Friday’s close (Nov. 4). The 5.5% surge in Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO) is impressive, but the ETF continues to reflect a bearish trend and so the latest pop doesn’t the change the fund’s negative outlook.

VWO Weekly Chart
VWO Weekly Chart

A key headwind for VWO and other emerging-markets funds: China, which continues to suffer economically from its zero-COVID policy. For example, the country reported monthly declines in exports and imports for October. “The weak export growth likely reflects both poor external demand as well as the supply disruptions due to COVID outbreaks,” says Zhiwei Zhang, chief economist at Pinpoint Asset Management.

China is VWO’s top country allocation with a roughly 33% weight in the country. That’s been a significant headache as China’s stock market has substantially underperformed global equities this year. The iShares MSCI China ETF (NASDAQ:MCHI) is down 34.6% year to date, well below the 21.1% haircut for Vanguard Total World Stock Index Fund ETF Shares (NYSE:VT) this year.

VT Daily Chart
VT Daily Chart

But some analysts predict that China may soon ease its lockdown policies. Goldman Sachs economists advise in a research note:

“We estimate that a full reopening could drive 20% upside for Chinese stocks based on empirical, top-down, and historical sensitivity analyses.”

The possibility that a policy change may be near appears to be a factor in the latest pop in China stocks.

U.S. shares posted the deepest loss for the major asset classes last week. Vanguard Total Stock Market Index Fund ETF Shares (NYSE:VTI) slumped 3.3%, the fund’s first weekly loss in the past three. The downturn reaffirms the bearish trend that continues to weigh on the ETF this year.

Last week’s mixed results for markets delivered a loss for the Global Market Index (GMI.F), an unmanaged benchmark, maintained by CapitalSpectator.com. This index holds all the major asset classes (except cash) in market-value weights via ETFs and represents a competitive measure for multi-asset-class-portfolio strategies overall. GMI.F shed 1.5% last week, the benchmark’s first weekly loss in the past three (red line in chart below).

Major Asset Classes 1-Week ETF Performance
Major Asset Classes 1-Week ETF Performance

For the one-year change, commodities (via WisdomTree Continuous Commodity Index Fund (NYSE:GCC)) remain the only winner for the major asset classes. Otherwise, losses prevail over the past 12 months through Friday’s close.

GMI.F’s one-year change: just shy of a 21% loss.

Major Asset Classes 1-Year ETF Performance
Major Asset Classes 1-Year ETF Performance

Reviewing the major asset classes through a drawdown lens continues to show steep declines from previous peaks. The softest drawdown at the end of last week: inflation-indexed US Treasuries (via iShares TIPS Bond ETF (NYSE:TIP)) with a 14% peak-to-trough decline. The deepest drawdown is in foreign real estate shares (via Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares (NASDAQ:VNQI)) with a roughly 33% slide.

GMI.F’s drawdown: -21.3% (green line in chart below).

Drawdown Distribution Histories
Drawdown Distribution Histories

Rebound In Global Markets Turned Mixed Last Week
 

Related Articles

Rebound In Global Markets Turned Mixed Last Week

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email