As US stocks push to record highs, trading volume is dwindling and broad market breadth is terrible...
But, as Eric Bush, of Gavekal Capital blog, explains, more than one out of five developed market stocks and more than two out of five emerging market stocks are in a bear market (down over 20% from a high) in the past 200 days. In the developed market, the percentage of stocks in a bear market has doubled from just 11% in late September to 22% as of Friday’s close. EM stocks have fared worse as just 18% of EM stocks were in a bear market in late September and now 44% are in bear market.
The aggregate numbers hide a disparity in the regional performance for equities. Since 10/26, the percentage of DM Asia equities that are in a bear market has increased from 9% to 22%. DM EMEA equities have had the worst performance as 36% of DM EMEA stocks are in a bear market. DM Americas equities have fared the best with just 13% of stocks in a bear market.
In the emerging markets, it has been EM Americas that has been blown up recently. 61%, which is an improvement from 76% on 11/11, of EM Americas stocks are in a bear market. 41% of EM Asia and 47% of EM EMEA equities are in a bear market.