In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Struggling With Supply
When we zoom out and look at structural trends there are bases everywhere. This is true for all risk assets, not just stocks, and we’re seeing it on multiple timeframes. Some international indexes are consolidating beneath their dot-com bubble highs from over 20-years ago. Many others, like Emerging Markets and the MSCI World Ex-US index, are currently churning beneath their 2007 highs. Then there is crude oil and small-cap financials (shown in the chart), which are just some among the long list of charts that are still consolidating beneath their 2018 highs. This is a critical level because it is when risk peaked around the globe during the last cycle. Last but not least, there are a lot of stocks and commodities that are currently digesting last year's gains beneath their 2021 highs. The point is that risk assets are still dealing with a lot of overhead resistance, and this is true across just about every timeframe. While the weight of the evidence continues to suggest these charts will eventually resolve higher, we want to be patient as it can take time to absorb supply at such critical levels.
