Fullermoney Chart Library Performance Filter Results ranking World Equity Indices in terms of US Dollar, Euro, British Pound and Australian Dollar performance
Eoin Treacy's view To wrap up the year I thought it might be instructive to compile a list of the winners and losers over 2010. To do this I put 96 indices into a section of my Favourites and used the Chart Library Performance Filter to rank them in terms of 12-month performance. I then redenominated the list to US Dollars, Euro, British Pounds and Australian Dollars to demonstrate the impact currency relative strength or weakness has had over the last year.
Here are detailed instructions on how to create sections in your Favourites and how to perform you own Performance and Hi/Lo Filters.
How do I create a list of my favourite instruments?
How do I use the Chart Library's Performance Filter?
The currency effect was particularly evident for Euro denominated assets, all of which suffered this year from the Euro's decline. As result this has been a particularly strong year for Euro investors in the USA where the S&P rose 21.7% in Euro terms. Germany which has been one of the best performing Eurozone indices rose 16.1% in its local currency.
Such has been the strength of the Australian Dollar that most indices have returned a negative performance when redenominated to that currency including the ASX which was mostly flat this year.
Frontier markets in Asia such as Mongolia, Sri Lanka and Bangladesh were this year's best performers. ASEAN markets and commodity led Latin American markets dominated in terms of performance. Technology led markets such as the Nasdaq-100, Israel and Taiwan also performed well this year.
According to this Hi/Lo filter for the above list, 40 indices have made at least new 6-month highs in the last five days. Commodity markets and Asian led growth remain dominant themes and while a number of Asian countries are now in inflation fighting mode, most chart patterns, particularly in more developed Asia appear able to support additional medium-term upside. Export led European markets are also breaking out of yearlong ranges and while somewhat overbought in the very short-term have potential to improve on their recent performance next year.
Yesterday, I reviewed a number of yield curve spreads and concluded that monetary conditions are still accommodative and while unlikely to get any more stimulative, those in the USA, Europe and the UK are a long way from becoming inverted. Monetary conditions are still a tailwind for risk assets.
Potential threats such as surging oil prices or significantly higher Treasury yields are both possibilities and will need to be monitored.