SOURCE: Russell Investments

Russell Investments

July 13, 2012 04:30 ET

Russell Indexes: The European "Summit Bump" May Be Getting Less Bumpy

SEATTLE, WA--(Marketwire - Jul 13, 2012) - Since the start of 2011, the closely watched "euro-area summit" meetings have been greeted with an initial burst of market optimism, as shown by the Russell Indexes, only to taper off in the following days. However, according to Russell Indexes this pattern could be changing.

  • In the two trading days following the euro-area summit on May 21st, 2011, the Russell Developed Europe Index and the Russell Eurozone Index were both positive, but turned negative over the following three trading days.

  • Similarly, in the two trading days following the euro-area summit on October 26th, 2011, the Russell Developed Europe Index and the Russell Eurozone Index were both positive, but turned negative over the following three trading days.

  • The aftermath of the most recent euro-area summit shows a different market reaction, with both Indexes showing positive returns over the five days including the day of the conference. European investors appear to be building on this recent optimism, with positive returns for the Russell Developed Europe and Russell Eurozone Indexes following Monday's meeting of euro-zone finance ministers in Brussels.

Gareth Parker, senior director of Index Research at Russell Indexes, comments:

"The Russell Indexes show that the market impact of the European fiscal summits has to-date been short-lived, with optimism on the back of each successive proclamation demonstrating very little staying power. However, recent market performance shows this pattern may be changing. It remains to be seen whether this is an indication of constructive change on the part of EU leaders or a market driven by short-term political news rather than long-term fundamentals."

 
Russell Index Post European Summit Returns
 


Index
2 day returns, July 21-22, 2011   5 day returns, July 21-27, 2011   2 day returns, Oct 26-27,
2011
  5 day returns, Oct 26-Nov1, 2011   2 day returns, June 29-July 2, 2012   5 day returns, June 29-July 5, 2012  

3 day returns, July 9-11, 2012
Russell Developed Europe Index 1.6%   -0.2%   3.6%   -2.1%   4.1%   5.1%  
0.4%
Russell EurozoneIndex 2.2%   -0.2%   4.5%   -3.3%   5.4%   5.6%  
0.3%
                           
                           

Source: Russell Investments

The Russell Global Index includes more than 10,000 securities in 48 countries and covers 98% of the investable global market. All securities in the index are classified according to size, region, country and sector. Daily Returns for the main components are available here: http://www.russell.com/indexes/data/daily_total_returns_global.asp

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