Courtesy of Doug Short.
The 2012 worldwide rally continued last week but at a slower pace as the average gain of our basket of eight indexes declined from 0.72% the previous week to 0.38%. Six of the eight indexes in our basket closed with a weekly gain, and likewise six of the eight now have double-digit gains for 2012. The Hang Seng and DAXK (DAX ex dividends) are in a virtual dead heat for the lead. But the Nikkei has been the astonishing performer over the past month, taking the top spot in weekly gains for three of the last four weeks and coming in second in the week it wasn’t the top performer.
The adjacent table shows the 2012 year-to-date performance of our gang of eight. As I mentioned above, six markets have double-digit gains at the end of nine weeks, one more than last week. The other two markets continue to have healthy single-digit gains. On a YTD basis even the worst-performing FTSE 100 has an impressive gain of 6.08%.
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.
