After all the huffing and puffing of the election, the "fiscal cliff" and the "Dancing With the Stars" season finale, the U.S. stock markets ended November within 0.3 percent of where they started, according to The Wall Street Journal.
Although the return for the month was basically flat, a chart of the daily returns looked more like a healthy man's electrocardiogram. From the closing high of the month to the closing low, the S&P 500 dropped 5.3 percent. Then, from that closing low to the last trading day of the month, the index rose 4.6 percent, according to data from Yahoo Finance.
Overseas, the markets jumped around, too:
- In Europe, the Stoxx Europe 600 index rose 2 percent on the month, its sixth monthly gain in a row.
- In China, the Shanghai Composite index fell 4.3 percent in November and is now down about 10 percent for the year.
- In Japan, the Nikkei Stock Average jumped 5.8 percent on the month to close at a seven-month high.
The Nikkei Index measures the performance of Japanese equity securities.
What's happening in Japan is rather interesting. The country will hold an election later this month to elect a prime minister. The leading candidate, Shinzo Abe, recently said the Bank of Japan should pursue a policy of unlimited bond purchases and 0-to-negative interest rates to rev up the moribund Japanese economy (sounds like the United States!).
Mr. Abe's easy money policy rhetoric helped lead to a roughly 10 percent drop in the value of the Japanese yen against a basket of developed market currencies between June and Nov. 19 of this year and helped propel last month's 5.8 percent rise in the Japanese stock market, according to news sources.
As last month's results show, we live in an interconnected world with many moving parts.
Even something as simple as a Japanese prime minister candidate promoting an easy money policy can move markets dramatically.
LOUIS P. INGARGIOLA is president of Ingargiola Wealth Management Group LLC. Find him at iwmg.us. Would you like to write for IN THIS CORNER? Contact us at business@times shamrock.com