Courtesy of Doug Short.
The 2012 worldwide rally went on hold last week. Five of the eight indexes in our basket finishing with a weekly loss, with the average of the eight at -0.77%. At least this is a less negative average than the previous week’s -1.88%. For the second week in a row, the S&P 500 finished in the top spot, but this week with gain of 0.81%, an improvement over the 0.50% loss the previous week. The Nikkei finished second with a 0.72% gain and the SENSEX was the other index with a positive weekly gain, a fractional 0.24%. The Shanghai Composite was the week’s biggest loser, with a loss of 3.69%. And the bloom remains off the rose in Europe with the DAXK, FTSE, and CAC 40 all finishing in the red.
Despite the selloff over the past two weeks, the adjacent table of the 2012 first quarter shows some remarkable performance. The Nikkei’s quarterly gain of 19.27% is tops the list and is the best quarter since its 22.80% gain in Q2 of 2009. The S&P 500’s 12.00% gain, touted by the financial press as its best quarter since 1998, is in the middle of the pack, snuggled between the SENSEX and Hang Seng. The Shanghai comes in last, but even its 2.88% quarterly advance would produce a healthy 11.52% annualized 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 SENSEX, 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.
