International Stock Markets Recap
These are the top 10 performing stock markets last week (above). I found a link that provides some spectacular and well organized information on World Markets. It’s worth checking it out when you have a minute.
The Chinese stock market (above chart) has put in a very nice move during the first two months of the year. On 12/31/08, the Shanghai SE Composite (SSC) was at 1820.805. On Friday it closed at 2261.47. That’s a move of 24% in almost two months. This was done while the US markets and most other world markets have been in a state of decline. The question to ask as we move forward in this financial crisis: Is China Immune? Time will tell.
Last year there was lots of talk about “decoupling”. This theory suggested that for years the US markets have been the leaders. When the US economy slowed, so did the rest of the world. So far this year most of the other foreign markets have suffered fates similar to the US markets. The charts above, comparing US GDP growth and China’s GDP growth, suggest that the decoupling theory may not be relevant.
The chart above is the German DAX (^GDAXI). Germany is the largest Eurozone Economy. You can see that on Friday it was testing its lows. The low in the DAX for 2008 was made on 10/24/08 at 4014.60. On Friday 2/20/09, the DAX closed at its lows – 4014.66 – barely above its 20008 lows. If the DAX breaks lower, then you can most likely expect a lower EURO and continued weakness in the German economy.
The Japanese Nikkei (^N225) (above) made new 2009 lows on Friday. It appears in a downtrend and would seem to want to go to retest 2008 lows also.
South Korea’s Kospi (^KS11) (above) – broke out of a wedge formation and headed lower. Last week it broke beneath the 50d EMA, so trend continues to be negative.
Conclusion: Most markets are not immune to this world financial crisis.