These fifteen charts give a wide scope view of emerging markets stocks and bonds in 2008 (as of Dec 19). The last chart in the list is for emerging market bonds.
Korea has recently been designated as developed by some, but we include it here, because it began the year as emerging and may or may not be universally viewed as developed.
Richard Shaw
QVM Group LLC
Here are 3-year charts comparing weekly performance of the US Dollar index to:
Relevant proxy securities are UUP or UDN (for Dollar up and Dollar down), SHV (for short-term Treasuries), SHY (for 1-3 year Treasuries), USO (for crude oil), GLD (for gold bullion), VEU (for world ex US stocks) and IWV or VTI (for US stocks).
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(A) USD to Treasuries
(B) USD to Oil & Gold
(C) USD to US & World ex US Stocks
Crazy Sept-Oct
Here is a 6-month daily chart of the US Dollar index versus the yield on the 3-month and 2-year Treasuries.
In addition to plunging interest rates, the tremendous confusion in the credit markets is reflected in the yield at the short end with the 3-month Treasuries in September and October.
Dollar Bearish
This is a 1-year daily chart of UDN (the inverse of the US Dollar index — Dollar down).
The red horizontal lines show that the Dollar is about half way between its recent highs and lows, but with an apparent tendency to go down (UDN going up).
Once the UDN price goes past the half way point, the trend may become more convincing. The flooding of Dollars in the many rescue programs makes further declines in the Dollar (and a rise in UDN) more likely than not.
Richard Shaw
QVM Group LLC
Securities listed in this table as investable proxies for countries are:
FXI, EWJ, VPL, EWH, EWM , EWP, EWL, EWQ, EFA, EIS, VTI, VT, EWG, VGK, EWT, LIS, EWN, EWU, EWI, THD, INP, EWD, EZA, EEM, EWS, ECH, EWW, EWY, EPP, EWA, EWC, EWZ, IRL, IF, EWK, TR, EWO, and RSX.
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Are oil and the US Dollar inverse to each other? No. At least not always.
There are numerous articles out about “Dollar Up & Oil Down”, or “Dollar Down & Oil Up”.
Sometimes that inverse movement occurs, and sometimes it does not. When the inverse correlation is working, there may be a trade, but when it is not, find something else to do.
Here is an 18-year monthly chart comparing the US Dollar (proxy UUP) to West Texas Intermediate Crude (proxy USO). You can see inverse correlation sometimes and not at other times.
The red line is for the US Dollar Index (USD against a trade weighted basket of currencies). The black line is the spot price of crude.
There is substantial argument today that the Dollar will fall due to all of the debt issuance associated with the economic rescue programs. There are also strong voices saying that oil will rebound to perhaps $70+ when economies improve, based on the average deep sea finding and lifting cost. That would suggest an inverse chart correlation may exist in the future, but the causation is not described as the same for each. Any future correlation may be partly coincidental and partly cause and effect.
It is not safe to assume that if one rises the other will necessarily fall. You must stay on your toes, or lose your toes, and maybe some fingers too. Remember that a big part of making money, is not losing money. Acting on false assumption about structural price relationships is one good way to lose money.
Richard Shaw
QVM Group LLC
These ten funds provide a good overview of market conditions globally. The charts that follow are 3-year weekly price charts (with volume) as of mid-day December 15, 2008 for each of the ten funds.
Categories and Proxy Funds:
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charts provided courtesy of www.StockCharts.com
