1) As we head towards Q3 reporting, a few numbers to think about:
|Current P/E Ratio||YTD Return Base Currency||% Above 100 Day Moving Average|
|S&P 500 Index||19.3||0.5%||4.5%|
|EURO STOXX 50 Index||21.4||-12.6%||-2.5%|
|FTSE 100 Index||23.2||-25.5%||-4.3%|
|Nikkei 225 Index||37.7||1.2%||4.0%|
|MSCI Emerging Mkt Index||19.5||-5.1%||1.8%|
It’s pretty tough to find another year when (base currency) equity market ytd. returns have been quite so widely dispersed. Nasdaq +18.9%, FTSE 100 Index -25.5%. Crikey!
2) For those looking to gauge underlying market support, our quants (when we occasionally let them out to sample natural light for a couple of minutes), think indices remaining above their 100 Day moving averages is deeply important.
3) This week’s MSCI sector numbers also make pretty painful reading:
4) Currencies you ask? Year to date returns:
|USD$ Vs EURO||-4.1%|
|GBP Vs USD$||-3.6%|
|GBP Vs EURO||-7.4%|
So to summarise: For international investors, (and COVID aside), places definitely not to have been caught visiting recently:
1) Non-US Equities 2) In an index which can’t hold its 100 Day Moving Average 3) In an index with a high Financials and Energy exposure 4) In Sterling
It’s only the 25th September. There’s still time to sell that FTSE tracker from the portfolio before the valuations come out.
A closing thought: Yield on ridiculously overvalued 10-year UK Gilt on 1st Jan 2020 ? 0.80% Return for the Year to Date for the broad Gilt Index? 6.02%