Courtesy of Doug Short.
World markets rallied across the board as the perceived risk of a European financial crisis was shoved in the closet. The S&P 500 hit an interim low on October 3rd and likewise European indexes the next day. The Nikkei and SENSEX followed suit one day later, and the Shanghai, after the long National Day holiday, hit an interim low this past Monday. The S&P 500 was the top gainer for the week, up 5.98%. Even the smallest gain, turned in by the Nikkei, was a pleasant 1.65%. In fact, the average weekly gain of the eight markets in our basket topped 4%, which raises the question: Bear market bounce or a new bull market? Stay tuned.
The tables below provide a concise overview of performance comparisons over the past four weeks for these seven 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.
