Japan is the only market out of 46 worldwide to post a gain in June according to S&P Dow Jones Indices. Japan is leading the developed markets with 1.42%, followed by US on -1.44% and Israel -1.45%. Greece on -12.32%, Italy -10.71% and Korea -8.34% are bottom of the table.
Morocco with -0.68% fall, Hungary -0.80% and South Africa -1.30% lead emerging markets. The worst performers are Egypt on -14.10%, Turkey on -13.26% and Brazil with -12.46%.
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices says that June was anything but boring, as the month started with all eyes on Japan and ended with them watching the US. “In Japan, the prospects for growth via new stimulus created rapid gains in the market and a declining yen, which eventually came into conflict with reality caused by too much expectation too fast. However, after some pullback, Japan managed to side with growth and a weaker yen, posting the best result of any market for June – and the only positive one for that matter, with a 1.42% gain. Japan also posted the best year-to-date return of any market, up 14.74%, with Ireland second, posting a 14.05% gain and the US third, with 12.99%”.
The Fed’s impact on global markets
“The Federal Reserve, which was expected to say little, instead laid out a proposed schedule for starting a pullback later in the year, and potentially ending it next year. Markets did not react well, as concern over losing something that is now seen as an entitlement program pushed short-term investors to take profits. The notice also emphasized the fact that the US was much further along the road to recovery, as the potential for support being removed was considered. Globally, the discussion is on more support. By month-end, however, the Fed, through most of its regional presidents, were backtracking on the statement, emphasizing that the Fed would pull back only once the economy (and employment) demonstrated it was on solid ground, and could support the pullback,” says Silverblatt.
All emerging markets posted a loss
“Four emerging markets compared to two developed ones posted double-digit losses in the month: Philippines, Brazil, Turkey and Egypt. Emerging markets declined a 6.81%, as the second quarter posted an 8.38% loss, putting the year-to-date loss at 9.03%, with only five markets reaming positive year-to-date (Indonesia 6.52%, Malaysia 4.23%, Philippines 3.88%, Thailand 2.44%, and Taiwan 1.96%).”
Developed markets did better than emerging markets
“Developed markets did much better, declining only 2.66%, but absent the U.S. 1.44% decline and Japanese 1.42% gain, were off 5.41% – better than emerging, but nothing to shout about. Year-to-date developed markets remain up 7.10%, but again, absent the U.S. and Japan, they are off 2.13%. The U.S. now accounts for 47.9% of S&P Global Broad Market index, up from 44.6% at year-end 2012, with Japan representing 9.0%, up from 8.2% at year-end. Together, these two countries account for 56.9% of the equity market,” he adds.