World Markets Weekend Update: A Rally For The Last Full Week Of 2013

All eight indexes in my international focus group posted gains over the holiday abbreviated week -- abbreviated for all but the Shanghai Composite, which logged five daily closes. The top performer, up 2.18%, was the UK's FTSE, an honor it last achieved way back in February. In fact, the three top positions went to the European indexes, all rising fractionally more than 2% for the last full week in 2013.
 
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 39.47% from its interim high of August 2009. At the other end, the DAXK and the Nikkei 225 posted new highs (all-time and interim, respectively) The S&P 500 closed Friday fractionally off its all-time high set on Thursday.
 
Here is snapshot of the YTD performances, with the volatile Nikkei as the ongoing attention-grabber.

The amazing rally in the Nikkei is attributable to its unprecented monetary policy, as the behavior of the Yen readily confirms.

Here is a table highlighting the 2013 year-to-date gains, sorted in that order, along with the 2013 interim highs for the eight indexes. The performance of the Japan's Nikkei, despite its volatility, puts it solidly in the top spot, up 55.64%. Only the Shanghai Composite is deep in the red YTD.

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.