Global Strength
The rest of the world has had the upper hand versus the US in 2023. Now relative leadership is being followed by improving trends.
Our ACWI market-based global trend indicator surged from less than 10% in October to nearly 70% in February. After following a typical consolidation pattern off the lows, this indicator is rising again. Global equity markets aren’t just relative (versus the US) leaders, they are sources of absolute strength.
More Context: US-based trends remain messy on the surface and weak beneath the surface. The global picture is showing more promise. Relative to the US, the rest of the world has been gaining strength since December. Over the past two weeks, the long-term trend in the ACWI ex US has turned higher on an absolute basis.
From a global breadth perspective, the expansion in the trends off the October lows is consistent with the move off the lows in 2016, 2019 and 2020. The 13-week improvement in this trend indicator surpassed 50% for just the 8th time in the past two decades. In all 7 of the previous cases, the ACWI was higher 6 months later.
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