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Mature Financial and Housing Market Indicators

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					Figure 1.6. Mature Financial and Housing Market Indicators
Broader financial market indicators reflect the impact of continuing market uncertainties and increasing concern about the economic outlook. Equity markets have turned downward while volatility measures have remained elevated. Residential property prices have moderated in a number of major markets.
120 Equity Markets (March 2000 = 100; national 110 currency) 100 90 80 70 60 50 40 30
2000 02

30 20

Adjusted Price-Earnings Ratios 2
Japan (right scale)

45 30 15 0

Wilshire 5000

10 0

Topix

Advanced economies1 DJ Euro Stoxx
04 06 Feb. 08

-10 -20

Germany (left scale) 2000 02

United States -15 (left scale) 04 06

-30 Feb. 08

50 Equity Market Volatility (three-month moving average) 40

Currency Volatility (three-month moving average)
Euro/dollar (implied)

18 15 12

30 20 10 0
S&P 500 daily volatility 2000 02 04 06 Mar. 08 VIX3 Yen/dollar (implied) 2000 02 04 06

9 6 3 Mar. 08

30 Residential Property Prices (12-month percent change) 20

Residential Property Prices (12-month percent change) Spain France

30

United States

United Kingdom

20

10

10

Italy
0

Canada Japan Germany
07: Q4 1995 97 99 2001 03 05

0

-10

1995 97

99 2001 03

05

-10 07: Q4

Sources: Bloomberg Financial Markets; CEIC Data Company Limited; Datastream; Haver Analytics; IMF, International Financial Statistics; OECD, Economic Outlook; and IMF staff calculations. 1Morgan Stanley Capital Index for industrial countries. 2Adjusted price-earnings ratio is the ratio of stock prices to the moving average of the previous 10 years’ earnings, adjusted for nominal trend growth. Adjusted price-earnings ratios are measured as the three-month moving average of deviations from the 1990–2008 (January) average. 3 VIX is the Chicago Board Options Exchange volatility index. This index is calculated by taking a weighted average of implied volatility for the eight S&P 500 calls and puts.


				
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