Market Wrap | 11.2.14

The Index Dashboards covers equity, commodity and fixed income markets to provide overarching insights into current market trends.

U.S. Index Dashboard

Highlights for January 2014 include:

• Equities across the globe began 2014 in the red. In the U.S., the Dow Jones Industrial Average and S&P 500 declined 5% and 3%, respectively.
•  Of the ten S&P 500 sectors, only utilities and health care (not surprisingly) managed to eke out a gain. Consumer discretionary, which was the best performing sector in 2013, fell by 6% this month.
• Outside the U.S., developed markets declined 4% while emerging markets, plagued by currency depreciation, dropped 6%. Notably, Latin America fell 10%
•  Bond yields declined during the month, despite the continuance of the Federal Reserve's taper of bond purchases.
• Commodities were relatively flat. The Dow Jones-UBS Commodity index, with a relatively higher weight in metals, was up less than 1% while the S&P GSCI declined 2%.

Source: S&P Dow Jones Indices LLC and/or its affiliates. Data as of January 31, 2014, except S&P Asia 50 data as of January 30, 2014. Index performance based on total return. Returns for international indices are in USD. Charts and graphs are provided for illustrative purposes. Past performance is no guarantee of future results.

Europe Index Dashboard

• The Europe 350® posted a loss of 1.7% over the month, weathering a sell-off of emerging market currencies better than the other developed markets, particularly the U.S.
• Positive returns were to be found in the recovering markets of Italy, Portugal and Ireland; the U.K. market - despite posting GDP growth better than at any point since 2007 - fell along with Germany and France.
• A further $10bn per month reduction in U.S. quantitative easing was announced at Bernanke’s final FOMC meeting. More surprisingly, Argentina devalued the peso by 15%, sparking a dramatic and discriminatory revaluation of currencies in Turkey, Russia, Brazil and South America. Globally, equity markets stuttered in response.
• Commodities had a volatile month. Natural Gas rose over a third intra-month, finishing 16% up over the period. Other commodities, particularly agriculture, did less well. The S&P GSCI and Dow Jones UBS Indices ended the month more or less where they began.
• While political tensions in the South China Sea calmed, the Geneva II peace talks ended without notable progress. The World Economic Forum in Davos concluded on a more positive note as leading central bankers dismissed concerns of EM contagion, insisting that the outlook is brighter than at any point in the past five years.

Source: S&P Dow Jones Indices LLC and/or its affiliates. Data as of January 31, 2013. Index performance based on total return. Returns for indices containing more than one currency area are in Euros, otherwise local currency. Charts and graphs are provided for illustrative purposes. Past performance is no guarantee of future results. For more information, please visit our website at www.spdji.com

Indices:

The Australian All Ordinaries Index has moved down decreasing by -0.4% since closing last Friday to 01:45 pm today. 

The rest of the world as measured by the MSCI index decreased -4.3% in A$ from closing last Friday to end of trade Thursday.

Have a great week,

The team at IPS