Major World Indexes: U.S. Stock Market Displays Leadership

In last weekend’s update, following massive world market gains, I posed the question: Bear market bounce or a new bull market? The past week tends to support the “bounce” conclusion. The S&P 500 was the top performer, up 1.12% at the end of a volatile week. The FTSE and DAX logged fractional gains on hopes of a unified finger in the dike holding back the debt crisis. France’s CAC 40 didn’t share the hopeful mood. Meanwhile, the Asia-Pacific contingent saw a selloff for the week, with the Shanghai suffering the wost loses and setting a new interim low, down 33.25% from its August 2009 high.

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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.

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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.

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Doug Short Ph.d is the author of dshort.com.

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