Courtesy of Doug Short.
“Europe Survived, But What’s Next?” That was my opening gambit for last weekend’s review of our eight world markets. Well, over the week that followed, European markets plummeted. The FTSE fell 2.57%, the DAX 4.76%, and France’s CAC 40 was the worst performer with a 6.31% nosedive. The other parts of the globe shared in the pain. Even the two top performers, the Nikkei and Hang Seng, both lost 1.6% (rounded to a decimal).
Year-to-date Returns Look Worse
As I pointed out over the past few weeks, we’re in the time of year when investment companies with any hope of posting positive returns for 2011 will do whatever they can to promote a year-end rally. At this point there are only nine market days left in 2011, and volume is traditionally thin. Of our International gang of eight, none is showing a year-to-date gain. The S&P 500 is still best YTD performer, off 3.02%, with the FTSE a distant second, down 8.69%. All the other markets are sporting double-digit YTS losses, with four of the eight down more than 20%.
We have continued to hear the pundits weigh in on the aftermath of the Brussels EU summit. Meanwhile the Shanghai set a new interim low on Thursday, down 37.18%, before rallying on Friday to trim the decline to -35.91%. In fact, six of the eight indexes tracked here are 24% to 36%, in round numbers, off their interim highs.
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.
