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World Markets Update: China Tops A Mixed Bag

By Doug ShortStock MarketsOct 16, 2016 12:47AM ET
www.investing.com/analysis/world-markets-update:-china-tops-a-mixed-bag-200158971
World Markets Update: China Tops A Mixed Bag
By Doug Short   |  Oct 16, 2016 12:47AM ET
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Our global watch list of eight indexes was a mixed bag last week, with three indexes posting gains and five posting losses. China's Shanghai Composite was the top performer, up 1.97% following the previous week of market closure celebrating Chinese National Day. Hong Kong's Hang Seng was the biggest loser, down 2.59%. The average of the eight was a modestly negative -0.26%.

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. 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.

World Markets Performance, Past Four Weeks
World Markets Performance, Past Four Weeks

Year-to-Date Performance

Here is an overlay of the eight illustrating their comparative performance so far in 2016.

World Markets 2016 YTD Performance
World Markets 2016 YTD Performance

World Markets 2016 Peak vs YTD
World Markets 2016 Peak vs YTD

Here is a table of the 2016 performance, sorted from high to low, along with the most recent highs for the eight indexes. Four indexes are in the green year-to-date, unchanged from last week. The UK's FTSE is the top performer, by over 6%, the plunge in the pound a key factor. China's Shanghai remains in the cellar.

The Global Bear Market Perspective

The column chart is sorted by the least to worst declines from previous peaks as of the week's end. Seven of our eight watch list indexes had dropped into bear territory (a 20% decline), the S&P 500 being the sole exception. As of the latest close, Shanghai Composite remains deep in the bear zone. The Nikkei is close to the bear zone and has been zigzagging in and out of over the past several weeks.

Global Bear Markets
Global Bear Markets

A Longer Perspective

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 using a log scale vertical axis, we get an excellent visualization of the relative performance. We've indexed each of the eight to 800 on the March 9th start date. The callout in the upper left corner shows the percent change from the start date to the latest weekly close.

World Markets since March 2009
World Markets since March 2009

Here is the same visualization, this time starting on October 9, 2007, the closing high for the S&P 500, a date the is approximately the mid-point of the range of market peaks, which started on June 1st for the CAC 40 and ended on January 8, 2008 for the SENSEX.

World Markets since October 2007
World Markets since October 2007

For a longer look at the relative performance, our final chart starts at the turn of the century, again indexing each at 800 for the start date.

World Markets since 2000
World Markets since 2000

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.

World Markets Update: China Tops A Mixed Bag
 
World Markets Update: China Tops A Mixed Bag

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