World Market Review
Guest post by Doug Short.
The past week was shaping up to be one of the strongest performances of the year for our eight featured world markets. But then Friday happened. Seven of the eight closed the week with a selloff following renewed anxiety over the eurozone debt crisis. Only the Hang Seng continued its rally, finishing the week as the top performer with a 2.87% gain. The DAXK came in a distant second, up 1.11%, but at Thursday’s close it was up 3.07%. The Shanghai Composite was the week’s worst performer. In fact, on Monday it hit a new interim low, 38.12% off its 2009 high.
The table inset in the chart below shows that four of the eight markets, the Asia-Pacific contingent, are in bear territory — the traditional designation for a 20% decline from an interim high, unchanged from last week. In our gang of eight, the S&P 500 remains the closest to an interim new high, down 3.97% from its April 2nd peak. At the other end, the Shanghai Composite is a stunning 37.53% off its interim high of August 2009.
As for year-to-date performance, here is a table showing the 2012 peak percentage gains, sorted in that order, and current YTD gains for the eight indexes. The Shanghai continues to hold dubious distinction of being the only index with a YTD loss. The range of gaps between 2012 highs and the YTD performance continues to highlight the worldwide volatility in equities this year.
A Closer Look at the Last Four Weeks
The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.
The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500, CAC 40 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and measuring the percent change, we get a better sense of the relative performance than if we align the lows.
A Longer Look Back
Here is the same chart starting from the turn of 21st century. The relative over-performance of the emerging markets (Shanghai, Mumbai SENSEX, Hang Seng) is readily apparent, especially the SENSEX, but the trend over the past two years has not been their friend (make that three years for the Shanghai).
Check back next weekend for a new update.