Are Global Markets Ready to Break Out?

NYSE: SPY | SPDR S&P 500 ETF Trust News, Ratings, and Charts

SPY – After years of the U.S. stock market outpacing nearly all other countries, the rest of the world is showing signs it’s ready to catch up, begging the question: Are global markets ready to break out? Continue reading for more details.

After years of the U.S. stock market outpacing nearly all other countries, the rest of the world is showing signs it’s ready to catch up.

To be sure, some of a glimmer of excitement and hope among those championing international diversification happened briefly in 2017. That’s when, for the first time in five years, international stocks beat U.S. stocks by a solid six percentage points, no less. But that hope was soon dashed, as U.S. stocks finished far ahead in 2018. The same is true so far in 2019.

But, could this time be different?  While U.S. indices, most notably the S&P 500 Index (SPY) are hitting all-time highs, most other countries or composite global indices are still well below one, three, and five-year highs.

One thing we’re seeing that is different is some of the developing nations, such as Russia (RSX)  and Brazil (EWZ) , which are closing in on new 52-week highs.

As we broaden our view and look at the All-World ETF (ACWI) which includes developed nations like Germany (EWG) and Japan (EWJ)  have just broken out of a nearly two-year base.  And there is likely more room to run as the markets remain relatively cheap compared to the U.S.

As we telescope out to a two-year picture of the Euro 600 Stoxx, we see the potential for a major breakout.  As technicians like to say, “the bigger the base, the bigger the space.”

If this does occur it would be a welcome development for allocators who have kept the faith and continued rebalancing into international stocks during all these years of US outperformance.

But be aware, while one of the main benefits of international diversification is that domestic and international equities have a relatively low correlation to each other which should reduce overall portfolio volatility.

The rub is that when the U.S. is in a bull market, international stocks tend to be at their lowest correlation and largest underperformance. Meaning, in good times, you might be left behind.


SPY shares were trading at $303.79 per share on Tuesday afternoon, up $0.49 (+0.16%). Year-to-date, SPY has gained 23.25%, versus a 23.25% rise in the benchmark S&P 500 index during the same period.


About the Author: Option Sensei


Steve has more than 30 years of investment experience with an expertise in options trading. He’s written for TheStreet.com, Minyanville and currently for Option Sensei. Learn more about Steve’s background, along with links to his most recent articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
SPYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Inflation Not Fading Fast Enough for Stock Investors

Investors may have celebrated the end of high inflation too soon. The CPI report shows inflation bouncing higher and thus pushing back the start date for Fed rate cuts. This has the S&P 500 (SPY) coming off recent highs. This begs questions like how much more downside could we see? And when will the bull market get back on track? 44 year investment veteran Steve Reitmeister shares his answers to these questions in this timely commentary including a preview of his top picks to stay ahead of the pack. Read on below for more...

Software Stock Watchlist - Should You Buy, Sell, or Hold?

Rapid growth in the software sector is fueled by increasing digitalization, growing cloud adoption, integration of AI and ML capabilities into software products, and rising cyber threats. So, let’s analyze whether you should buy, hold, or sell software stocks The Sage Group (SGPYY), Qualys (QLYS), and Blackbaud (BLKB). Read more to find out...

Bank of America (BAC) Braces for Earnings - Strategies for Investors

Bank of America (BAC), the second-largest U.S. lender, will publish its first-quarter earnings on April 16. With the bank’s net interest income expected to decline in the first quarter, should investors consider investing in the stock ahead of its earnings? Read on to learn my view...

4 Bullish Airliner Stocks to Consider - Buy or Watch?

The airline industry is well-poised for continued growth thanks to surging passenger and air cargo demand amid rapid urbanization, globalization, and economic expansion. So, should you buy or watch airline stocks SkyWest (SKYW), International Consolidated Airlines (ICAGY), Controladora Vuela (VLRS), and Air Canada (ACDVF)? Read on…

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More SPDR S&P 500 ETF Trust (SPY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All SPY News