Courtesy of Doug Short.
Over the past week world markets have begun to see a weakening of the January Effect. Three of the eight indexes, the S&P 500, FTSE and CAC 40 hovered around the flatline, and the Shanghai was closed. The SENSEX was the top performer with a gain of nearly 3% with the Hang Seng in second with a gain approaching 2%. The DAXK and Nikkei 225 held third and fourth place, respectively.
The adjacent table shows the 2012 year-to-date performance of our gang of eight. The BSE SENSEX and Hang Seng are neck and neck with double-digit gains. The DAXK (i.e., the DAX ex dividends) is in strong third place, just three basis points from double digits. The Shanghai Composite was closed last week for Spring Festival (aka Chinese New Year) but lays claim to fourth place. The CAC 40, S&P 500 and Nikkei are hovering in the 4.5% to 5% range, with the FTSE off to the weakest start with a nevetheless quite respectable 2.89% YTD gain.
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.
