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Euro-Stocks Correlation Continues

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

The strong correlation between the euro and stocks continues to hold. Stocks briefly touched below their February intraday lows shortly after the open. However, they have halved their losses as the euro has retraced some of its earlier losses, sitting now at its session high.

While European markets closed off their lows too, many are still sitting at multi-month lows:

Greece: 14-month low

Spain: 12-month low

France: 10-month low

Italy: 10-month low

Ireland: 10-month low

U.K.: 8.5-month low

Germany: 3-month low

Additionally, with the declines today, a handful of European benchmark indices have re-entered bear market territory. Spain’s Ibex 35, Portugal’s PSI 20, and Italy’s MIB Index are all down more than 20 percent since their highs in April.

As overseas markets have dropped sharply, so have many of the major international ETFs, whose steep declines have severely underperformed the U.S. markets over the past month. With dampening global growth expectations, investors have specifically turned away from emerging markets such as Brazil, China, and Russia, and even commodity-driven countries like Australia. Traders note that these ETFs have seen a jump in volume over the past month, and are seeing solid activity again today.

Since April Highs:

Market Vectors Russia down 28 percent

iShares MSCI Australia down 26 percent

iShares MSCI Brazil down 23 percent

iShares MSCI Emerging Markets down 19 percent

SPDR S&P China down 17 percent

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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