A chart titled "Historic returns" with x-axis titled "Months ago" and y-axis titled "Return (T-20Y=100)". On the x-axis months count backwards from 240 on the left hand side to 0 on the right hand side. The y-axis labels are made out on the right hand side and show in increments of 200 from zero to 1800. The chart has a legend to the right labelling the two lines shown. In blue is: "Nikkei 225 (1 Apr 1970 - 2 Apr 1990)" and in red is "S&P 500 (1 Apr 2005 - 28 Mar 2025)". On the body of the chart the two lines move relatively close to each other in characteristic stock market oscillations for the first 12.5 years of the chart (between months 240 and 90). During this period the Nikkei line slopes straight upward between months 220 and 205 crossing the S&P line and staying above it by this amount until the noted divergence at month 90. Then, the Nikkei starts to move much more pronouncedly upward from a base of 271 and, while having one major correction between months 30 and 27, peaks at 1525 at month 3 before sharply dropping to 1100 at month 0 on the right hand side. The major correction was the stock market crash in October of 1987 when the Nikkei fell from 1020 to 926 the following month. Conversely, the S&P moves up more slightly from a base of 223 having the Covid-19 correction in month 61 falling from 255 to 223 and bouncing back to 251 the following month to a first peak of 412 at month 40 after which it starts a volatile down-trend bottoming at 309 in month 31 to resume the long term up-trend and peak at 522 on month 3, having dropped to 482 at month 0 on the right hand side. The divergence starts to gap between months 50 and 40 when the Nikkei moves from 519 to 726 and blows open on month 40 when the S&P peaks while the Nikkei commences the sharpest part of the long term up trend. Data sources are listed in the legend. Nikkei 225: macrotrends.net/2593/nikkei-225-index-historical-chart-data S&P 500: https://www.investing.com/indices/us-spx-500-historical-data
This Fridays chart. #Historic #returns of the #SPX vs #N225 (1970-90 and 2005-present). I note the divergence in monetary policy during the critical period between 3 and 1/4 and 4 and 1/4 years into the chart from the most recent readings corresponding with the gap opening up.
