As we noted in this week’s Weekly Market Commentary, the equity bull market isn’t limited to only the United States, as various other countries are near either record highs or 52-week highs. Today we take a closer look at two charts that could bode well for a continuation of the global equity rally.
First up, with the French election over and no major surprises, we’ll take another look at Europe. We’ve shared this chart a few times over the past several months, and the breakout finally occurred. After nearly 17 years, the STOXX Europe 50 Index finally broke above a very significant trendline, signaling a potential major change in trend for European equities. In fact, we first shared this chart six months ago and noted at the time that Europe was potentially looking better. It is early, and we want to see this breakout hold, but this is another indication better times could finally be coming for Europe.
Next up, would you believe that South Korean stocks are at new highs? With a Presidential election taking place in the country today, South Korea is in the news again. If all you followed was the country’s geopolitical news, you’d have no clue. Per Ryan Detrick, Senior Market Strategist, “With all the talk of their neighbor to the north and recent political scandals, it is quite surprising to see South Korea’s Seoul Composite up 13% year to date and at new all-time highs. Given South Korea is a large component of emerging markets (EM), this not only a positive sign for EM, but also the global equity rally.”
Technically, the South Korea Seoul Composite traded in a very tight range for more than six years, before the recent breakout. This nice-looking chart pattern could be the start of a leg higher for South Korea and EM stocks in general.
These are only two charts, but they illustrate the participation of key international markets in the global bull market—thus increasing the odds of its lasting power.