The strong rally of the previous week mostly evaporated over the last five sessions. We saw another mixed bag with a negative skew with six of the eight indexes posting losses. The Shanghai Composite was the top performer with a 1.12% gain followed by France’s CAC 40, up 0.76% and at its 2013 high. The week’s big loser was (no surprise) Japan’s Nikkei 225, down a hair-raising 5.88%. The S&P 500 finished fifth, the same as last week, and coincidentally it was down 1.07% this week, erasing its 1.07% gain the week before.
The Shanghai 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. After factoring in this week’s top performance the index is still down 40.88% from its interim high of August 2009. The S&P 500, at the other end, is down 1.07% from its all-time high, with the CAC 40 only 1.94% from an interim high following its 2009 global crisis trough. Here is a closer look at the YTD performances, which continues to be dominated by the astonishing volatility of the Nikkei.
