Why is the Stock Market So Divided?

Investment returns seem to fall into two distinct camps this year - very good or very bad. Is this dispersion justified? Or have markets become exaggerated

Emma Morgan 5 November, 2018 | 2:13PM

From a performance perspective, markets continue to experience mixed conditions that carry an undercurrent of emerging-markets instability and US strength. This is consistent by broad asset class–whether we are talking about equities, fixed income or currency – but also in rhetoric. Looking at equities first, the performance numbers have been reasonably resilient, albeit with significant dispersion.

On a strict US versus emerging markets pairing, emerging markets continue to be pressured and have done since they peaked in January. Most recently, we have seen a small bounce back, helped by a Russian boom of over 10% in September, but offset by market stress in India, which fell almost 10% over the same period – in US dollar terms, even worse in local-currency terms.

For longer-term perspective, we find that broad emerging-markets equities have delivered 45% over the five years to 30 September 2018, but even less if priced in US dollars at 19%.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Emma Morgan  is a Portfolio Manager for Morningstar Investment Management EMEA

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies