Long-term trends and behavioral tendencies likely to influence the Global Equities market in 2017

One of today’s most glaring inter-market divergences is the relative performance of U.S. versus non-U.S. equities.

For dollar-based investors, non-U.S. stocks have underperformed U.S. stocks by a whopping 50% over the past six years.

Non-U.S. markets have traded sideways for eight years in what is either a giant topping process or a giant base-building process. The eventual resolution of this pattern is likely to set the long-term trend.

Technical conditions continue to favor the U.S., but extreme valuation divergences suggest the possibility of a sea change.

In contrast with U.S. equities, the rest of the world is trading sideways

 

Europe, developed-Pacific, and emerging-market indices are all trading sideways.

  • All major non-U.S. segments have traded sideways for the past eight  years.

  • No segment has achieved a higher high in currency-adjusted gold terms since the initial bounce off  the panic lows of 2008/9.

Are non-U.S. stocks replicating the post-1974 Dow?

Valuation divergences are extreme… suggesting the possibility of a sea change

Bonus chart… Will China overcome the “Trump” narrative?

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