Courtesy of Doug Short.
The 2012 rally accelerated last week as the average gain of our basket of eight markets rose from 0.06% the previous week to a stellar finish of 2.27%. World leadership was generally consistent with last week, with the Asia-Pacific region taking three of the top four spots. The Shanghai Composite is the exception to the geographic pattern, dropping from second place to the cellar. Despite its weekly gain of 1.38%, the S&P 500 again found itself in the bottom half of the pack, but finishing above the FTSE 100 and Shanghai Composite.
The adjacent table shows the 2012 year-to-date performance of our gang of eight. Four markets have double-digit gains at the end of seven weeks, with the Nikkei’s outstanding 4.88% gain over the last five sessions putting it into the double-digit club. The other four markets continue to have healthy single-digit gains. On a YTD basis even the worst-performing FTSE 100 has an impressive gain of close to six percent by mid-February.
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.
