No matter how you look at it, the last two days have been nasty for equities. However, the declines vary greatly depending on whether or not you adjust for currency movements. For instance, last Friday when equity indices around Europe were down sharply, we heard a number of commentators suggesting the fact that the 3% decline in UK’s FTSE-100, which was down less than half as much as major European bourses, signaled that perhaps the Brexit vote was worse for Europe than it was for the UK.  What these commentators failed to take into account, however, was the monstrous decline in the British pound.  After taking the impact of currency into account, UK equities were flat out creamed and continued to decline on Monday.

The first table below lists the ten largest two-day declines in major European equity indices over the last thirty years expressed in local currency returns.  As shown, the FTSE-100’s 5% decline doesn’t even register in the top ten.  Likewise, the decline in the German DAX, which has dropped slightly more than 9%, doesn’t make the cut for the top ten either.  Meanwhile, for French equities, the CAC 40 is down over 10% in the last two trading days, which ranks as the third worst decline since 1987 behind only October 2008 and November 1987.  Finally, in Spain, the IBEX 35 is currently having its worst two-day decline since the start of 1987.

Worst 2 Days Local

While local currency returns for major European benchmark indices have been extremely weak, when translated into USD returns, the last two days have been even worse.  The table below shows the worst two-day returns for major European indices in dollar adjusted terms.  As shown, for all four benchmarks shown, the last two days ranks in the top ten.  For the UK, it is the worst two-day stretch since the 1987 Crash.  For Germany, the only other two-day stretches that have been worse than the current one are October 2008 and October 1989.  For France, the only two-day stretch that was worse was in October 2008, while for Spain it is the worst two-day stretch in the last 30 years.  In USD adjusted returns, the last two days have been a time for the ages.

Worst 2 Days USD


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