The second weekly close for the eight world markets in my focus group was a mixed bag, with the average of the eight in the red (a modest -0.23%) for the first time since mid-November. This was a major deceleration from the previous Friday's average gain of 2.75%. Japan's Nikkei took the top spot with a 1.06% gain for the week, over double the gain of the second place spot, nabbed by the UK's FTSE 100. The third-place S&P 500 was the only other index to finish with a gain. At the bottom of the stack was China's Shanghai Composite, with a loss of 1.49% after five consecutive weekly gains.
And speaking of the Shanghai, even with a 14.5% rally since its interim low in early December, it remains the only index on the watch list in bear territory -- the traditional designation for a 20% decline from an interim high. See the table inset (lower right) in the chart below. The index is still down 35.39% from its interim high of August 2009. At the other end of the inset, the FTSE has set an interim high and the S&P 500 is only seven basis points below its interim high set on Thursday.
As for the 2013 performances, here is a table highlighting the year-to-date gains, sorted in that order, and the 2013 interim highs for the eight indexes. As we can readily see, 2013 is off to a great start despite a relatively lackluster performance last week, thanks to a rally on steroids the previous week.
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.
Click to enlarge next two images
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).