The week ending July 4th, 2008 was a bloodbath for world equity markets. Of the major indexes, only 2 were positive for the week overall: Austria, which gained 1%, and the Czech Republic which skyrocketed 7%, despite the financial stress in the system globally. The worst performing markets got crushed, with the Pacific Rim containing 6 of the bottom 10 performing equity markets for the week overall. Outside of Asia, Ireland, Brazil, and Chile were the worst performers, dropping between 6-8% each, with Turkey putting up the worst numbers, dropping an outrageous 10% in a single week.
In Asia, Taiwan and Korea, both dropped 6.5%. with China dropping 8%. The Philippines dropped 8.5%, New Zealand 10%, and the once high flying Bombay Sensex dropped a whopping 11.5%. As the contagion of the current financial debacle spreads throughout the globe, it is highly likely such events will continue to rock the markets. The next few weeks may be quite interesting, as earnings results are announced starting with Alcoa on July 8th.
In regards to individual sectors, the biggest losers of the week were the platinum producers, the casinos, and the GSE. Impala Platinum and Anglo Platinum lost 19% and 10% respectively, with MGM and Las Vegas Sands losing 18% each. FreddieMac followed up its dismal performance last week, by getting crushed again in Monday’s trading, along with its sister, Fannie Mae. Reports that indicate a change in accounting standards may cause the GSE giants to require $75 billion dollars of new cash have scared investors to a possible dilution in the near futures.
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