Given the apparent strength of the ASX 200 this week, I was curious to know how it has performed relative to the S&P 500 since the QE Infinity announcement.
To be fairly compared they must of course both be measured in the same currency, with the obvious choice being the USD.
At 2am AEST on September 14, shortly before QE Infinity was announced, the ASX 200 was priced in after hours trade at 4348 AUD or 4543 USD. The ASX 200 closed after hours trading this week at 4489 AUD or 4573 USD, for a move higher of 0.66% in US dollar terms since just before QE Infinity.
Doing the same calculation for the S&P 500, at 2am AEST on September 14 it was trading at 1438 (USD of course), and closed this week's after hours trade at 1461, for a move higher of 1.60% in US dollar terms.
So while the ASX 200 is up strongly in Aussie dollar terms, the global investor holding USDs is seeing it lag the S&P 500. Up only 0.66% compared to 1.60%.
To me this is interesting both in its own right and as a warning that the Aussie market is perhaps not as strong as this week's headline numbers would suggest. Keep half an eye on the USA. And another half an eye on China, where markets reopen on Monday after a one week holiday. Will China play catch up to the Western rally, or throw a spanner in the works? We'll have to wait and see.