A Partial Recovery For Global Markets Last Week

 VTI-2.86%Add to/Remove from WatchlistAdd to Watchlist Add Position

Global markets posted a mixed run in last week’s trading,Cainiu Futures Software Items but the general trend continues to skew negative, based on a set of proxy ETFs through Friday’s close (Oct. 7).

A broad measure commodities was the big winner for the major asset classes. WisdomTree Continuous Commodity Index Fund (NYSE:GCC) popped a hefty 5.5% last week, the ETF’s first weekly gain in a month. But the rebound doesn’t change the technical bias, which still skews negative.

GCC Weekly Chart

A headwind for sentiment in the commodities space is a renewed focus on China’s slowing economy, the world’s second-largest consumer of crude oil after the US. Stephen Innes, managing director at SPI Asset Management, advises in a research note:

“Oil … is getting hit with the triple whammy of China’s economic weakness, US monetary policy tightening and Biden administration SPR intervention.”

US stocks (Vanguard Total Stock Market Index Fund ETF Shares (NYSE:VTI)) participated in last week’s rally, but a broad measure of US bonds (Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ:BND)) continued falling.

Last week’s biggest loser: US real estate investment trusts via Vanguard Real Estate (Vanguard Real Estate Index Fund ETF Shares (NYSE:VNQ)), which closed down 3.4%, the fourth straight weekly loss.

Market action was a net positive last week for the Global Market Index (GMI.F), an unmanaged benchmark, maintained by CapitalSpectator.com. This index holds all the major asset classes (except cash) in market-value weights via ETFs and represents a competitive measure for multi-asset-class portfolio strategies overall. GMI.F rose 1.2%, the benchmark’s first weekly gain in the past four.

Major Asset Classes 1-Week Performance

For the one-year window, commodities continue to hold on to the only gain for this time window among the major asset classes. GCC closed up 8.0% on Friday vs. the year-earlier price.

The rest of the major asset classes are still in the red for one-year results. Foreign corporate bonds (PICB) continue to post the deepest one-year loss: a steep 31.5% decline.

GMI.F is down 20.0% for the past year.

Major Asset Classes 1-Year ETF Performance

Using a drawdown lens to profile the major asset classes continues to show a range of steep peak-to-trough declines. Inflation-indexed US government bonds (iShares TIPS Bond ETF (NYSE:TIP)) are still posting the softest drawdown: -13.8%. The steepest is currently in foreign corporate bonds (Invesco International Corporate Bond ETF (NYSE:PICB)) via a 35.7% drawdown.

GMI.F’s drawdown: nearly -24% (green line in chart below).

Drawdown Distribution History

Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!