Courtesy of Doug Short.
The second week of the 2012 saw advances from seven of our eight benchmark world indexes. The FTSE 100 had the sole negative weekly close with the S&P 500 next to the bottom. What we’re seeing, at least in the short term, is a bit of leader-laggard role reversal, with the 500 and FTSE, the two indexes closest to their interim highs, at the bottom of the weekly table, and the worst of the bear markets, the Shanghai, as the top performer, up 3.75%.
In light of Standard & Poor’s downgrade of nine European markets late Friday, it will be especially interesting to see how the world markets respond in the week ahead.
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. This change levels the playing field, so to speak, for our international comparisons.
