Over the past week, financial markets continued to rise, both stocks and bonds and commodities. The broadest global stock index MSCI All Country World recorded a gain of 1.4%. This time we were especially pleased with emerging markets. MSCI Emerging Markets index recorded a gain of 2.3% and thus exceeded the MSCI World developed markets index, which recorded a gain of 1.2%. To our great satisfaction, the performance of Central European stocks was again above average, as CECEEUR index recorded a gain of 2.3%. Overall, however, global stock markets as a whole remain overvalued as our global valuation Z-Score reaches 2.3, which is still close to an all-time high. The average global equity valuation is thus approximately 2.3 standard deviations above the historical average.
The broadest global bond index, Bloomberg Barclays Global Aggregate Bond, again recorded a very modest gain of 0.3%, while the average global bond yield to maturity fell by 0.03 percentage point to 1.12%. However, in real inflation-adjusted terms, the average global bond yield to maturity remains deeply negative, currently at -2.5%. The performance of corporate bond indices was also very slightly positive.
Commodities also thrived. Global commodity index S&P GSCI recorded a gain of 2.5%. The price of a barrel of the North Sea Brent rose 4.8% to $ 70. Gold rose 1.4% to $ 1903 an ounce.
Dollar was stable last week. DXY dollar index, which measures the dollar's performance against a basket of other major currencies, did not change its value over the past week. Against the euro, the dollar weakened slightly by 0.1% to 1.219 USD/EUR. On the other hand, dollar strengthened slightly against koruna by 0.4% to CZK/USD 20.97. 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.