From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
The same strong rotational currents that have been in place in the US since last summer have finally begun to spill over to International stocks… but, not all of them.
For the first time in about a decade, evidence suggests that stock markets around the world have finally built a strong foundation relative to their US counterparts, and might just be ready for a sustained period of outperformance.
How big the move will be and how long it will last are always some of the most difficult variables to predict. We can merely position ourselves accordingly based on the information we do have, and then be keenly aware of new data points as they come in, and constantly re-evaluate and adjust our outlook as appropriate.
As for the potential structural bull-to-bear reversal in the long-running trend of outperformance from US stocks… the seeds have definitely been planted for such a development to occur.
Now, we can only sit back and wait to see if those seeds blossom into something real or if they’re duds – in which case the recent price action in favor of International stocks will likely unwind and end up being just another dead-cat bounce.
In this post, we’ll run through some of the things we’re currently keeping a close eye on for an early indication as to whether these recent changes in the global landscape are likely to have some real staying power this time around.