Over the past week, financial markets continued to rise modestly, both stocks and bonds and commodities. The broadest global stock index MSCI All Country World recorded a gain of 0.7%. We were again pleased with the emerging markets. MSCI Emerging Markets index recorded a gain of 1.5% and thus surpassed MSCI World index of developed markets which recorded a gain of only 0.6%. To our great satisfaction, the performance of Central European equities was again above average, as CECEEUR index recorded a gain of 1.9%. Overall, however, global stock markets as a whole remain overvalued as our global valuation Z-Score reaches 2.4, which is still close to the all-time high. The average global equity valuation is thus approximately 2.4 standard deviations above the historical average, which is truly unprecedented.
The broadest global bond index, Bloomberg Barclays Global Aggregate Bond, recorded a very modest gain of 0.1%, while the average global bond yield to maturity remained at 1.12%. However, in real inflation-adjusted terms, the average global bond yield to maturity remains deeply negative, currently at -2.5%. Performance of corporate bond indices was also very slightly positive.
Commodities also performed well. S&P GSCI global commodity index recorded a gain of 2.8%. The price of a barrel of the North Sea Brent rose 3.2% to $ 72. Gold weakened by 0.7% to $ 1,890 per troy ounce.
Dollar was again very stable over the last week. DXY dollar index, which measures the dollar's performance against a basket of other major currencies, strengthened slightly by 0.1% during the last week. Against the euro, dollar strengthened slightly by 0.2% to 1.217 USD/EUR. Dollar also strengthened against koruna by 0.2% to 21.00 CZK/USD. Koruna did not change its value against euro and remained at the level of 25.45 CZK/EUR.
Michal Stupavský
Investment Strategist at Conseq Investment Management, a.s.