World Markets Update: Rebound Accelerates
Doug Short | Mar 06, 2016 12:10AM ET
The global market rebound accelerated over the past week. All eight indexes on our world watch list posted gains, and the average of the eight was an impressive 3.82%, a major improvement over the 0.47% average of the previous week. India's SENSEX was the top performer, up 6.44%. The UK's FTSE 100 had the smallest gain, up a respectable 1.70%.
Here is an overlay of the eight, illustrating their comparative performance so far in 2016.
Above is a table of the 2016 performance, sorted from high to low, along with the interim highs for the eight indexes. The top performing FTSE 100 is down only 0.69%, with the S&P 500 in second at -2.15%. The Shanghai Composite is the worst YTD performer, down 18.79% at the end of the ninth week of 2016 trading. Japan's Nikkei is second from the bottom with its YTD loss of 10.61%.
h2 A Closer Look at the Last Four Weeks/h2The tables below provides a concise overview of performance comparisons over the past four weeks for these eight major indexes. We'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 column chart, above, is sorted by the least to worst declines from previous peaks as of Friday's close. Seven of our eight watch list indexes had dropped into bear territory (20% decline), the S&P 500 being the sole exception. As of the latest close, three of the eight remain in the bear zone, down from five the previous week. Japan's Nikkei and India's SENSEX have now also recovered above the -20% benchmark.
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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.
h3 /h3 h3 A Longer Look Back/h3Here 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: We track Germany's DAXK a price-only index, instead of the more familiar DAX index (which includes dividends), for consistency with the other indexes, which do not include dividends.
All the indexes are calculated in their local currencies.
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