After months of selling pressure, the most widely followed commodity contracts are testing critical potential support levels.
More importantly, these support levels are the prior-cycle highs marked by the 2018 peaks. If there was ever a place where the bulls needed to step in and repair the damage this is it!
First, we have our commodity index that equal-weights the top 33 contracts in our universe:
Earlier this week, the index completed an 18-month top and broke to its lowest level since April 2021. This highlights the broad selling pressure across the commodity space and the need for a...
From the desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more--but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
In the past we've had bonds down for 3 consecutive quarters and we've had stocks down for 3 (or more) consecutive quarters. Since at least 1976, we have never before had stocks & bonds both down in 3 consecutive quarters.
Why It Matters:
The lack of safe harbors in 2022 has taken a financial and emotional toll on investors. After the storm passes, some may want to re-evaluate their investment opportunity set and perceived risk tolerance.
High-yield debt hasn’t blown out relative to Treasuries. Regardless, the largest markets in the world are buckling under pressure.
You have to look outside the US and beyond high-yield corporate bonds to see the stress. Here are three cautionary data points to consider: European sovereign spreads, US bond market volatility, and the steep decline in investment-grade bonds.
When you weigh the evidence, it’s clear risks are rising for US markets.
Let’s look at the charts!
First, here's a look at European sovereign spreads:
At first glance, these spreads look similar to high-yield spreads. They’re chopping sideways at or near their peaks from the 2020 crash. Nothing alarming or unusual from the countries at the highest risk of default – Spain, Italy, or Portugal.
It’s a different story when it comes to the UK, as the spread between the UK-...