ASX 200 leading the world in monthly performance, oil and US stocks higher, ASX futures up 14 points
Despite what feels to have been a punishing January, the ASX 200 is performing well on a relative basis, both globally and regionally. The ASX 200's one-month performance is -4.44%, less than half the fall of its closest regional peer (Japan's Nikkei at -10.22%) and much less than Hong Kong (-12.74%) and China (-24.14%). Germany's DAX is down -9.52% for the month and in the US the Dow, S&P 500 and NASDAQ are down -8.32%, -7.93% and -10.60%, respectively.
Today's first chart is a weekly one that tracks the ASX 200 and the US S&P 500 VIX index, and, despite the differing profile of volatility, I continue to believe that the 2011 bear market provides a sound comparison for the last 12 months. On a weekly closing basis, the 2011 peak to trough was 20.1%, 2015's was 18.1%. Elevated volatility in 2011 lasted about 6 months, and we're about 5 months into the current phase of high volatility, which really just projects aggressive selling and basically constitutes a bear market. For those with a particular emotional attachment to the GFC, take a further look back at the big blue mountain that represents lead-up to the GFC and the subsequent sell-off. Look at the shape and severity of the moves compared with the 'noisier' profile of the falls in 2015 – these two periods are not comparable.
Today's second chart shows the short-term bounce in the AUDUSD currency pair, which has settled to US$0.708 this morning after hitting highs above US$0.7120 last night. Japanese inflation figures will report at 10:30am today, with Euro-zone inflation being reported at 9pm tonight.
Source: Rivkin, Saxo Bank
This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via firstname.lastname@example.org or by phoning +612 8302 3600.