Courtesy of Doug Short.
The 2012 rally decelerated last week as the average gain of our basket of eight indexes declined from 2.27% the previous week to a healthy but more modest 0.72%. The Asia-Pacific region populated both the top and bottom of the roster, with the Shanghai Composite up 3.50% and the Nikkei 225 up 2.80%, while the Hang Seng and BSE SENSEX were the only indexes with a weekly decline. Despite its fractional gain of 0.33%, the S&P had the sole distinction of setting a new interim high following the Great Financial Crisis.
The adjacent table shows the 2012 year-to-date performance of our gang of eight. Five markets have double-digit gains at the end of eight weeks, one more than last week. The other three markets continue to have healthy single-digit gains. On a YTD basis even the worst-performing FTSE 100 has an impressive gain of 6.51%.
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, Hang Seng) is readily apparent.
Check back next weekend for a new update.
Note from dshort: At the suggestion of Joerg Willig, a finance professional in Germany, I replaced the DAX index, which includes dividends, with the price-only DAXK, which is consistent with the other indexes.