In August, U.S. stocks extended its lead over non-U.S. stocks by the widest margin year-to-date. In this month’s FRM Market Commentary, Milliman’s Joe Becker addresses the following:
- Down six out of the last seven months, emerging market (EM) stocks extended their slide in August, falling another 2.6%. They now trail US stocks by 16.4% YTD, much of which is attributable to a stronger dollar.
- The S&P 500 notched its fifth consecutive positive monthly return and its 27th out of the last 30.
- From its March 9, 2009 financial crisis low through August, the S&P 500 has:
- Climbed 329%
- Increased its nominal 12-month dividend by 90%
- Generated a total return (with dividend reinvestment) of 423%
- Run for 2,389 days without a 20% drawdown (although came close in Oct. 2011)
- Small-cap stocks have moved higher six straight months generating a 20% cumulative return.
- US equity market volatility remained exceptionally low in August while EM volatility broke above its five-year average.
- The correlation of the S&P 500 to global ex-US equities increased again in August, as did its correlation to the U.S. aggregate bond market, amidst falling interest rates.
To learn more, download the full commentary at MRIC.com.