Courtesy of Doug Short.
Five of the eight indexes in my international focus group posted gains over the past week, with Hong Kong’s Hang Seng and China’s Shanghai Composite in a near dead heat for the top spot with gains of 2.88% and 2.83%, respectively. Japan’s Nikkei was a distant third with a nevertheless impressive 1.42% advance. The S&P 500 finished fifth with a modest 0.37% weekly gain, but that was enough to set another all-time high. At the other end of the scale, India’s SENSEX lost 0.89%, its third consecutive last-place finish.
The Shanghai Composite remains the only index on the watch list in bear territory — the traditional designation for a 20% decline from an interim high. See the table inset (lower right) in the chart below. The index is down 36.73% from its interim high of August 2009. At the other end, the S&P 500 set new a new high with Germany’s DAXK a mere 0.07% from its latest high.
Here is snapshot of the YTD performances, with the volatile Nikkei as the ongoing attention-grabber.
For the past couple of months I’ve included a daily chart of the Nikkei with its Fibonacci retracement highlighted. Here’s a different view, a two-year weekly chart highlighting the massive upward trend of support in 2013. Also, we can clearly see the “pre-Abenomics” doldrums, the anticipation of the change in monetary policy, and the actual effect it has had (although it clearly got a little ahead of itself in the April-May timeframe).
Here is a table highlighting the 2013 year-to-date gains, sorted in that order, along with the 2013 interim highs for the eight indexes. The strong performance of the Japan’s Nikkei, despite its big correction and subsequent volatility, puts it solidly in the top spot with a 47.97% YTD gain and closing in onr its peak gain of 50.33%. Only the Shanghai Composite is stuck in the red YTD.
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 and Hang Seng) up to their 2007 peaks is evident, and the SENSEX remains by far the top performer. The Shanghai, in contrast, formed a perfect Eiffel Tower from late 2006 to late 2009.
Check back next week for a new update.
Note from dshort: I track Germany’s DAXK a price-only index, instead of the more familiar DAX index (which includes dividends), for constency with the other indexes, which do not include dividends.
