Week 13 Global Markets Trending and Performance

There are a large number of global markets that have ETFs. I picked the ones that have lesser correlation with the S&P 500.

Trending Heat Map

We can see mostly green in the above picture. So, while we can say that only the large-cap technology stocks are lifting up the US markets, we can see that the broader global markets are also mostly trending bullish.

Correlation

Here is the table that shows the correlation of these markets with the S&P 500 and also against each other. I kept the correlation with S&P 500 to under 0.7.

Performance

The trending looks similar to the US markets and the performance is also similar to the US markets. We see January up, then February universally down and then March mostly up. Strangely, India is the worst performing market this year so far. I say strangely because India is expected to have the best growth rates as a country this year and going forward. Markets have a way of doing their own thing and we have to respect that.

Week-over-Week Performance

I am guessing it will not be strange to say the likelihood of next week being a down week is high. We can see that most of the markets, although they have lower correlation with the S&P 500, trend and move like the S&P 500. So, then what is the purpose of tracking all of them?

For me it is a validation or lack thereof of the trend. When I see most markets moving along-with the S&P 500, I will most likely trade only the S&P 500. However, now and then there are divergences that can be observed and traded.