Wealth curve

Global stock markets have repaired $9 trillion in market val

As global stock markets repaired more than $9 trillion in market capitalization in less than two months, investors are now beginning to doubt whether the rally will continue.
"The rise in stock prices may be too high and too urgent," said Bob Doll, senior portfolio manager at Nuveen LLC. "The market may need to consolidate or callback." Nuveen manages about $930 billion in assets.
From the technical indicators, the situation varies from place to place around the world. Momentum indicators suggest that Europe and the US are overbought, while developing countries are less worrying. The US market-wide indicator looks strong, but the gradual decline in the performance of cyclical stocks is a worrying early sign.
The following are some of the indicators that traders are paying attention to around the world:
Asia
Asian stock markets have rebounded from the Christmas low by about 12%, close to technical resistance, and the gains may be temporarily limited. The MSCI Asia Pacific Index has risen to the key 200-day moving average but has not broken. The index is still on the Bollinger track, which is often seen as a sign that the rally will continue.
Europe
European stock markets are better. The Stoxx Europe 600 index closed above the 200-day moving average on Wednesday, the first time since October. However, the relative strength indicator for measuring price kinetic energy is hovering near the overbought level. Although this is not always a reliable predictor of market turning, when the indicator reached this level last May, the benchmark index fell and continued until the end of the year.
The United States
is satisfied with the bullishness of the US stock market, which was a good omen for the stock market in the past. At the close of trading on Friday, the S&P 500 index of more than 90% of the constituent stocks was above the 50-day average, reaching the highest ratio since the beginning of 2016. The number of stocks that have risen in the past two months has been large, and the New York Stock Exchange's cumulative drop target has reached a record high, although the index itself is still below its peak.
However, shorts may say that some indicators suggest that the rebound may have been excessive. For example, cyclical stocks that pushed the US stock market to rebound from the Christmas low have begun to lose their advantage over defensive stocks.
Emerging Markets
Despite the latest survey of global fund managers by Bank of America Merrill Lynch, emerging markets have surpassed the US dollar as the most “hot” deal, but enthusiasm for emerging market equities has cooled. MSCIThe relative strength index of the Emerging Markets Index has fallen below the overbought level in early February and remains between Bollinger's online and lower rails, indicating that the index has not yet shown signs of a correction.