Sunday, 18 September 2011

World Markets Weekend Review: Big DAX Rebound

The DAX, last week's disaster, down 6.29%, came charging back with a 7.39% weekly gain. Can you say "volatility"? Six of our eight international indexes finished in the green, with the Asian pair, the Shanghai and Hang Seng, chalking up losses. The Hang Seng was the worst performer for the week, but the Shanghai has three consecutive weeks of losses and now occupies the bottom spot in declines from interim highs.

At the other end of the declines from highs, the S&P 500 regained the top spot, occupied last week by the FTSE. Five of our eight indexes are now below the 20% decline-from-interim-high benchmark.
The tables below provide a concise overview of performance comparisons over the past four weeks for these seven 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.

by: Doug Short


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