World Stock Markets Second-Best Week of 2014

By: PhilStockWorld

Courtesy of Doug Short: At Friday’s close the eight markets on my world watch list collectively had their second-best weekly performance in 2014 (the previous week being the best). Five of the eight posted gains, some quite substantial, and the three that didn’t advance had only fractional setbacks — the S&P 500 being the worst performer, down a tiny 0.13%. After three weeks as the biggest loser, Japan’s Nikkei 225 took the top spot with a 3.86% rally. The UK’s FTSE 100 was up 2.62%, India’s SENSEX 1.64%, Hong Kong’s Hang Seng 1.12% and France’s CAC 40 0.94%.

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 39.11% from its interim high of August 2009. At the other end, France’s CAC 40 is at a new an interim high following its 2009 low, and the FTSE 100 is only 0.03% below its interim high of last May. The S&P 500 is 0.53% off its all-time high of January 15th.

Here is a look at 2014 so far.

Here is a table highlighting the year-to-date index performance, sorted from high to low, along with the 2014 interim highs for the eight indexes. At this point, six of the eight indexes are in the red, with last year’s big winner, the Nikkei, deep in the YTD cellar.

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.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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