“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.”
~ William Feather
This week on the Solari Report, I will examine equity markets year-to-date. This report will feature detailed performance charts and sector comparisons.
The equity markets in Q3 proved, yet again, that bull markets do not go up in a straight line. The US market – which has experienced significant gains since 2011 – finally entered the correction zone with the S&P 500 down -6.7% year-to-date. This was not a big swing from the high as the S&P was up 3.4% in Q2.
The large corrections came in Europe and Asia. The German DAX was up 26% for the year in Q2 and then took a swan dive, closing Q3 down -1.5%. The deepest correction came in China with the China Large Cap ETF (FXI) up 28% in April, closing Q3 down -13%.
In my Q2 Equities Overview, I addressed the subject of portfolio risk management. This week (and in our upcoming 3rd Quarter Wrap Up) I will focus on the Chinese stock market. The Chinese equity markets, reestablished after a 40 year hiatus in 1990, have grown in 25 years to a market capitalization of $7 trillion USD (or $10 trillion if you include the Hong Kong exchange) – approximately 10% of global equity market capitalization.
As always, I will be addressing questions from subscribers in Ask Catherine. If you’re a subscriber, you can post your questions at the bottom of this page after logging in.
In Let’s Go to The Movies I will discuss David Versus Monsanto, a documentary exploring Canadian farmer Percy Schmeiser’s battle with the corporate giant, Monsanto. The recent ban on GMO’s by Scotland, Germany, France and other European countries is a major setback to the US plan to assert control of the global agricultural market. That has implications for both financial markets and the US dollar as reserve currency.
Please join me for the Solari Report’s Q3 Equity Overview this Thursday. If you’re not a subscriber yet, you can learn more about becoming one here.