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Europe Is Now Red For The Year
A sea of red is flowing from European equity markets and it seems they are unable to stem the flow as IBEX (the Italian Spanish equity index) nears March 2009 lows (down 18% YTD) but dispersion across European indices is very high from the DAX +14% YTD to Italy, Greece, and Spain very much in the red YTD. However, for the second week in a row, European equity markets (as tracked by the narrow Dow-equivalent Euro Stoxx 50) close with a negative return year-to-date -0.3%. The broader BE500 index is still up around 5% (compared to over 10% YTD gains in the S&P 500). European high yield credit is back at 3-month lows and investment grade credit at 2-month lows. This week, however, followed the exact same path as last week with equity and credit trading in a wide range but notably this week credit markets dramatically underperformed the ever-hopeful equity market with financials underperforming the heaviest. European sovereigns are generally wider close-to-close on the week but just like corporate credit and equity, they generally followed a similar path to last week with a broad range trade - though a clear trend generally wider overall. Italy underperformed Spain on the week and Portugal, as we noted earlier was the big winner on what looked like basis trade-driven flows as opposed to whole new world of relief. Ahead of the G-20 meetings, it did not seem like there was much hope in sovereign credit - even as financials and corporates did lift a little off their multi-month lows and having seen the headlines of the G-20 draft, it appears there is no magic bullet there anyway - no matter how big they think their bazooka is.
Since just after LTRO2, European equities have been sliding broadly. As can be seen here, the Stoxx 50 (Dow-equivalent) has now closed red for the year 2 weeks in a row...
But dispersion is high across the various individual nations markets...(and note today saw some bounce in stocks broadly)...
Credit markets underperformed equity markets notably on the week but remain in a broad range post-NFP. From the ugly close last Friday, stocks are up handsomely (the broader BE500 being tracked here - dark green arrow) with today's rally lifting IG and HY (XOVER) credit back near unch (modestly wider/weaker on the week - orange arrow) but financials (senior and sub) remain weak (red arrow)...
And finally sovereigns continue to leak wider - admittedly in a range also but Italy has pulled wider to catch up to Spain's post-NFP weakness this week (orange arrow - oval to oval)...
Charts: Bloomberg
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"The plan was to drink until the pain's over. But what's worse, the pain or the hangover?" - Kanye West
US will be red for the year in a few weeks!
Thes fire crackers will lead to fireworks!
This all feels just like 2011.
Or 2008 or whatever.
"A sea of red is flowing from European equity markets and it seems they are unable to stem the flow as IBEX (the Italian equity index) nears March 2009 lows (down 18% YTD)"
Sorry guys but IBEX is the Spanish index, not the Italian.
Red for the year with a building divergence in the credit markets (closing now?). Place your bets.
Here's my bet: The talent manager for BIS gets more hits on her site TODAY than the Mets do ALL SEASON....................
calling my bookie now.
Ask him what the "spread" is for me....................
he said if you need to ask then you cannot afford to make the trade.
CORRECTION IBEX IS SPAIN
The only spread is in the German taxpayer's rear and we all know that's where the ECB bazooka goes.
http://www.youtube.com/watch?v=y4dnXyv5V3I&feature=fvsr
I know you're out there...I can feel you now. I know that
you're afraid. You're afraid of us, you're afraid of
change...I don't know the future...I didn't come here to
tell you how this is going to end, I came here to tell you
how this is going to begin. Now, I'm going to hang up
this phone, and I'm going to show these people what you
don't want them to see. I'm going to show them a world
without you...a world without rules and controls, without
borders or boundaries. A world...where anything is
possible.
http://youtu.be/ZGlML3FR8Y8
The plethora of "creative" financing techniques coming out of the IMF/G20 meetings this weekend should be mind numbing!
One can only imagine what the markets will look like on the Sun/Mon open.
But the Euro stays the same....kind of wierd actually...
Take a look at the GBP though. It's been parabolic all week. Must be the U.S. and Canada doing a stealth IMF contribution. ( they are still on the sidelines officially) G.B. has committed to £ 10 billion to IMF. /sarc
Europe europe europe...
How come you never hear
FINANCIAL CRISIS HITS PAKISTAN DEBT TO GDP RATIO SOARS
ALGERIAN ECONOMY UNDERPERFORMS
AFHANISTAN BOND AUCTION FAILS
BURMA SEEKS EMERGENCY LOANS FROM CENTRAL BANKS
headlines???
Interesting that Germany seems to be doing just fine right now.
Will they end up controlling Europe again..??
Better dead than red?
Markets down with European elections within a few weeks. Why should the US be any different in Sep-Oct? Would you want to be long going into the weekend?
IBEX is the Spanish stock index, not the Italian
Correct, was just gonna post that
"as IBEX (the Italian equity index) nears March 2009 lows"
IBEX is the Spanish index. The Italian index is called FTSE MIB or just MIB - Milano Italia Borsa
edit: too late
'Red for the year'...well certainly we cant have that! Everyone knows things are only supposed to expand, in particular when youre bankrupt and it has to be at an ever increasing expansion pace as well. Europe down not up? Absolute travesty....obviously this is a 'crisis' and we need to print some more fake money now to fix it.
That's rough. Thank goodness we decoupled from economic reality last year.
And the con game continues in the US markets. I find the US finacial markets a complete disgrace and blame thye gansters on Wall Street and in the Fed. Collapse coming after the election and they think we are this fucking dumb.
Yep, exactly why I think they want 'republican whitey' back in there so it will all be his fault when it implodes and the media will have absolutely no problem ripping the much-hated white republican to shreds over all the sudden appearance of very bad things and mayhem in the streets and a collapsed market. They cant do that with a black guy in there, just never going to happen.