The world rally continued this past week, but the momentum has eased. The eight indexes in our focus group posted an average gain of 0.64% for the week, about half the 1.25% gain from the previous weekly close. The global rotation changed conspicuously, with the four Asia-Pacific indexes occupying the top four slots, a complete reversal from what we saw last weekend. China's Shanghai Composite, the top weekly gainer last Friday, dropped to last place this week.
In fact, the Shanghai 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 34.00% from its interim high of August 2009. At the other end of the inset, the S&P 500 and FTSE 100 set interim highs on Friday.
As for their 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 with six of the eight at their YTD highs, up from five last 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.
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).