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World markets weekend update: A boost from central banks

By Advisor Perspectives
Capital Markets

All eight indexes on our world watch list posted gains over the past week, with central bank policy as a key driver. On Thursday the ECB's president hinted at another stimulus package, and on Friday the Chinese central bank cut interest rates for the sixth time in 12 months. The two Eurozone indexes were the week's biggest winners, the DAX up 6.83% and the CAC 40 up 4.70%. The Nikkei finished in third place with a 2.92% advance and the S&P 500 finished fourth with a 2.07% gain.

Here is an overlay of the eight for a sense of their comparative performance so far in 2015.

As for the Shanghai Composite, below is a log-scale weekly chart illustrating the bubble that peaked in 2007 and the bubble that started last year. The index is now down -33.9% from its June 12 peak but well off its -43.3% interim low set on July 8th. Optimists might identify the interim low as the beginning of a new bull market. But a comparison with the failed rallies during the crash that began in 2007 suggests a less encouraging forecast.

 

A Closer Look at the Last Four Weeks

Read more at Advisor Perspectives.
Photo: Indigo Skies Photography

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