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STOCK MARKETPLACES: AT THE CROSSROADS © Leo Haviland, September 4, 2017
“Money beats soul, every time.” “Roadhouse Blues”, by The Doors, with John Lee Hooker
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CONCLUSION AND OVERVIEW
Many observers (including stock owners) are complacent about prospects for the emergence of significant stock marketplace declines, particularly in regard to the United States stock arena. Even a ten percent drop in US equities would shock many audiences. The S+P 500 and related American benchmarks nevertheless have been in the process of establishing an important top. The glorious long run bull advance in American stocks which started with the S+P 500’s major bottom at 667 on 3/6/09 probably is at or near its end. The S+P 500’s record height to date is 8/8//17’s 2491. That S+P 500 elevation probably will not be exceeded by much, if at all.
American stocks “in general”, although not an isolated island, have their own “individual” stories, as do assorted other stock marketplaces, whether in relation to earnings, valuations, or other phenomena. Yet marketplace history in recent years suggests that prices of stock marketplace signposts for other advanced (developed) nations and for emerging marketplaces “in general” likely will accompany any notable downtrend (including a bear move) in US equities.
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Admittedly, since first quarter 2016, and especially after around America’s November 2016 Presidential election, emerging stock marketplaces generally have rallied alongside the S+P 500 and its domestic comrades such as the Dow Jones Industrial Average, Nasdaq Composite, and Wilshire 5000. But the MSCI Emerging Stock Markets Index, from Morgan Stanley (“MXEF”), a guide for emerging stock marketplaces, is around major resistance and (unlike the S+P 500) well below all-time highs.
Owners of (particularly “investors”) American and international equities hopeful of enjoying further upward rides should note other significant yellow warning lights. In mid-year 2017, leading European and Japanese stock marketplaces established highs. The S+P 500’s 6/19/17 interim top at 2454 occurred around the time of these highs. However, these European and Japanese mid-2017 stock tops have not been broken. And the S+P 500’s August 2017 high exceeds its June 2017 one by only 1.5 percent.
But after their dreary troughs in first quarter 2016, didn’t Germany’s DAX and the United Kingdom’s FTSE exceed their spring 2015 plateaus, as did the S+P 500 (5/20/15 high 2135). Yes, but the April 2015 summit for a broader measure for European stock performance, the STOXX Europe 600 Index (“SXXP”), remains intact. Japan’s June 2015 Nikkei height likewise remains a roadblock.
The adventures of Canada’s S+P/Toronto Stock Exchange Composite Index (“SPTSX”) are also a bearish sign to worldwide stock marketplaces. It has failed to vault over its February 2017 top (established prior to the mid-2017 ones in Europe and Japan). Also, February 2017’s SPTSX plateau edged only 1.6 percent above its September 2014 pinnacle.
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Stock Marketplaces- at the Crossroads (9-4-17)
