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And The Best Performing Asset In August Was...
August is the month in which the third try for a global economic recovery officially snapped, with first China, then Europe and finally Latin America succumbing to pre-recession forces and/or outright contraction. Which, in the New Normal, is great news as it means more hopes for even greater imminent central bank easing and "stimulus" if only for the wealthiest (and also please ignore the fact that 6 years of more of the same has not worked, this time will be different). Which explains why August, otherwise the sleepiest month of the year, proved to be fairly strong with both equities and bonds moving higher in tandem.
In fact, the situation in Europe is so dire, that European government bonds yields reached/retested their record multi-century all time lows. As Deutsche Bank summarizes, the 10yr government bond yields for Germany, France, Italy, Spain, and Switzerland declined by 27bp, 28bp, 26bp, 28bp and 11bp in August to 0.89%, 1.25%, 2.44%, 2.23% and 0.44% respectively. From a total returns perspective, a 2% gain in August was the best monthly performance for Bunds and OATs since January which brings their YTD gains to around 8-9%. Not bad in the context of a 7% and 4% YTD gains in Stoxx 600 and the FTSE 100. Italian and Spanish government bonds are still ahead though on a YTD basis with total returns to date at around 12-13%. Staying in rates, US Treasuries were somewhat of a laggard relative to its European peers in August with a monthly return of around 1.2%. Nonetheless, it was still the biggest gain for Treasuries since January and the outperformance in long bonds has also driven the 10s/30s curve to its flattest since June 2009. The search for yield has also benefited Credit on both sides of the Atlantic. Total returns were positive across the main European, US and Sterling credit benchmarks although the highlight was a rebound in US HY. The asset class gained +1.8% in August after having lost 1.7% in July as outflows steadied and reversed as the month progressed.
DM equities were generally higher but the highlight goes to the S&P 500 (+4%) after having made its first crossing of the 2,000 mark in August. Performance was more mixed in Europe but generally still moderately positive. EM equities had another decent month with the MSCI EM index enjoying a 2% plus return for the fourth consecutive month. Commodities were the key losers in August. The CRB index (-0.6%) finished lower for its second consecutive month. Copper, WTI, Brent, Sugar, Silver were all between 2%-6% lower. The fact that Oil prices have now gone officially negative for the first time in 2014 despite the ongoing geopolitical tension is perhaps telling us something?
But nowhere is the humor of central planning better exhibited than in Brazil was a clear outperformer with the BOVESPA (+10%) posting its best monthly performance since January 2012. Why? Because Brazil just entered a recession. Perhaps the reason why the joke that global thermonuclear war will send futures limit up is funny, is because it's true...
August return by asset class:
And YTD:
Source: Deutsche Bank
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Less substance=higher yield. That's the only investment strategy you need.
And that thesis will work until it all goes tits up, which seems like it should be any minute now. Hell, I've thought we were doomed for the past four to fifteen years, but it shows what I know...
Football starts soon. Should be a great season. I am immensely disturbed that Mike "BadBoy" Sam was cut.
The best performing asset in August is the same as it has been every month for over 100 years...
TYRANNY!
I'm in Manhatten for the Holiday's. Where's the best place to photograph a bankster jumping?
Behind him at the window.
The Hamptons, into his swimming pool, in the compound, surrounded by security in para-military gear.
They will never jump. They will "transition" to Paraguay and Uraguay.
Yeah, it's about time we're due another one. I was hoping it would be exponential by now but we're still struggling to maintain linear. Has anyone got the appropriate graph so we can all have a look?
Bad is good.
Peace is war.
Debt is credit.
Money is fungible.
Slavery is Freedom!
revolutinon! after Starbucks of course........
Rio baby....~
Fuckin Rio....AND ALL THAT FUCKIN OIL....AND NO E.P.A.
Brazil in recession! No! What does this mean for real estate in Miami and the Bal Harbor shops? Gasp!
no change is the new taper?
http://www.newyorkfed.org/markets/tot_operation_schedule.html#tabs-2
what happened to the $-10 B/mo?
Still planing to end in October. If you have new information, please share. However, as destructive/unethical as QE is, ZIRP (NIRP in real terms) is far more unethical and destructive for captial and savers. As long as the central banks can give money (no interest remember) to their chosen few they don't have a problem, you do.
Everything looks normal to me. Just stand on your hands it will become all to clear to you too.
OK Right. Brazil has just entered recession and the Bovespa rises. That figures. Not.
It also explains why the BRL has risen in value on the FX markets over the last week. Not.
Am I missing something?
It's called sarcasm, that's the whole point of the article. It doesn't make sense because there is no longer any market that allows for true price discovery.
Just as Zimbabwe's stock market soared, when measured in Zimbabwe dollars. I seems to remember two guys holding up a sign that said, "Starving billionaires," with three-comma bank notes stuck on for decoration.
Brazil..... ok.
There is no stronger force in the world right now then the government. Because the goverment is willing to point a gun at its citizens to extract money to pay its debts or allow the bankers to play their malicious games with the currency to get to the same end.
The bankers know this, the gov officials know this....it is the people that fail to recognize what drives it. Therefore, you get the response that you see here. People indignant and confused about how a market would go up when things are bad. Becase they have not recognized who is in control here.
It is quite simple if you recognize the bankers have a gun to the head of the government. The gov officials, fearful for their own wellbeing, will put a gun to the head of their citizens to pay off the bankers. And in our world today, that extraction is driven primarily through inflation and thus the upside down, bad is good for the banker class.
It will only be when the citizens recognize this and that they, the people are the strongest force will this change. When they get rid of the bankers/mafia thugs, their goverment will once again stop oppressing them.....END THE FED!!
Yeah, i agree with you... But is easy to explain this brazilian rali after Roussefs gov. got hit by candidate Marina... It's a political raly, not an economic one... If that's right or not, i'll leave that to the gods.
hahaha
New presidential election polls indicate that Marina Silva, a pro-USA pro crony-capitalism, former Greens will win the election.
She's a Brazilian version of Obama. Luring the people with a promise of change, but she's nothing other than a Soros agent.
That's why that plane with the candidate was downed. So she could take his place on the ballot.
mort and eddie murphy run barter town. Who run barter town?