Below is a look at the year-to-date returns (in local currency) of stock markets for 75 countries around the world.  The average country has posted a gain of 8.94% year-to-date, and 59 of the 75 countries (79%) are in the green.  Argentina and Greece have posted the biggest YTD gains at this point with moves of 40%+.  Russia ranks third with a gain of 30.89%, followed by Jamaica (+26.79%), Romania (+22.22%), and New Zealand (21.29%).

The United States has been the 8th biggest winner this year with a gain of 19.68%.  Notice that six of the seven G7 countries are roughly in the top third, which means developed countries have been doing very well this year.  Japan is the biggest laggard of the G7 countries, but it’s hard to be too disappointed with its YTD gain of 8.14%.

Three of the four BRIC countries rank in the top fourteen, led by Russia at +30.89%.  Brazil ranks second of the BRICs with a YTD gain of 19.58%, while China is up 17%.  India ranks last of the BRICs at +7.64%.

Lebanon and Oman have been the two worst-performing countries this year with declines of just over 10%.  Nigeria, Pakistan, and Sri Lanka are all down more than 8%, while Kenya is down just over 5%.  The remaining countries in the red are only down slightly.  Start a two-week free trial to one of Bespoke’s three premium subscription services for in-depth market analysis and actionable ideas on a daily basis.

The S&P 500 and Dow have continued to make pushes up to new all-time highs in the past week but sentiment remains subdued.  AAII’s weekly sentiment survey showed 33.61% of respondents have bullish sentiment, up 0.5% from last week.  As we have been mentioning, this is in the lower range of sentiment readings given the run-up to new highs.  At this level, bullish sentiment is in the 15th percentile of times that the S&P 500 has reached a new all-time high in the past week.  Additionally, the current reading is still below the historical average for bullish sentiment as it has been for nine straight weeks now. That is the longest such streak since the 12-week streak ending May 17th of last year.

While bullish sentiment only saw a slight increase, bearish sentiment saw its largest decline in a month falling from 32.35% down to 27.5%.  Bearish sentiment is now at its lowest level since the first week of May and is also below the historical average for the first time since that same week.

Most of the losses to bearish sentiment were picked up by those reporting as neutral.  The percentage of investors reporting this sentiment rose 4.4% to 38.89%. This brings it back to the high 30’s levels that it has sat at for a majority of 2019. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Fed Chair Powell’s testimony on Capitol Hill yesterday made frequent mentions of the strength of the labor market, and initial jobless claims data released this morning helped to give further support of this strength. Claims were expected to come in unchanged from last week at 221K but instead fell to a seasonally adjusted level of 209K. That is the lowest print in about three months (since April 12th) when claims came in at the multi-decade low of 193K. Whereas the past few weeks were near the upper end of the past year’s range, this drop now brings claims back down towards the lower end of that range. In other words, while not a new low, it is still a healthy number. As such, the record streaks at or below 250K and 300K continue at 92 weeks and 227 weeks, respectively.

The four-week moving average helps to sift out some of the fluctuations of the high-frequency weekly data. This week saw the moving average fall from 222.5K down to 219.25K. Unlike the weekly number, there were actually several lower prints throughout the past couple of months, so this does not bring the indicator back towards the lower end of its range. In fact, this decrease only brings things back to where they stood about one month ago.

As could be expected given seasonal patterns, on a non-seasonally adjusted basis, claims rose to 232.7K after falling to 224.5K last week. Typically, the current week of the year sees a sizeable increase in claims averaging a week-over-week rise of over 42K over the past fifteen years, but this week’s change was much smaller with only an 8.2K increase. This week’s NSA number was also lower than the comparable week in 2018 when NSA claims were 264.9K.  Additionally, this was the lowest reading in claims for the current week of the year of the current cycle and it was substantially under the average for the past couple of decades of 371.69K.    Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

Recent data from the Investment Company Institute shows that mutual fund investors are fleeing equity funds at a staggering pace. As shown in the table below, one-week outflows from equity funds were larger (more negative) than all but 2% of prior periods since 2007. The four week sum of flows is similarly negative. At the same time, fixed income mutual funds are seeing huge and consistent inflows, with total bond flows near the 90th percentile this week.

As shown in the charts below, the one-week collapse in equity fund flows are not without precedent. That said, only periods with extreme equity market volatility saw similarly large declines in cash. January 2008 (as the financial crisis was picking up), October 2008 (in the wake of Lehman and TARP), March 2009 (the ultimate low for the equity market), August 2011 (the US debt downgrade), November 2016 (the last Presidential election) and January of this year (when equities had dropped almost 20% from closing highs). Unlike all of those prior instances, stocks are near all-time highs and volatility is extremely low, presenting an interesting puzzle for assessing the sentiment implications of equity fund outflows.  Start a two-week free trial to Bespoke Institutional for access to our weekly fund flows analysis in our Closer report.