Twenty-three developed markets were down slightly on average, but all except two remain in a Confirmed Uptrend, the 24th week with a majority. Twenty-three emerging markets fell 0.6% on average and 16 markets are in a Confirmed Uptrend, the same as last week.
Author: Kenley Scott
Kenley Scott is a senior equity analyst and sector strategist covering the APAC region and the Energy sector. He is a member of the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets. Kenley also writes the Global Sector Summary, part of the Sector Strategy service, which identifies emerging sector strength and weakness across 46 countries every week. After working as a commodities broker, Kenley joined the firm in July 2006. He has a B.S. in Statistics from the University of California, Riverside and also holds a Series 65 securities license.
Global Growth Stocks Getting Back on Track
Twenty-three developed markets were flat on average, pausing after five weeksof gains. Markets were mixed with 11 falling, including five (Japan, Italy, Portugal,Ireland, Belgium) by 0.9-1.2%. Twelve gained, although just two (Hong Kong and Singapore) by at least 1%.
Markets Gain Broadly Once Again, U.S. Health Care Perks Up
Twenty-three developed markets gained 1.5%, rising on average for a fifth week. All markets gained, including 17by at least 1% and five (Hong Kong, Switzerland, Singapore, Austria, Italy) by at least 2%. Just six markets rose less than 1%, including Portugal (0.5%) and the Netherlands (0.7%).
Global Sector Strategy with Kenley Scott – January 5, 2017
Kenley Scott, lead sector strategist for O’Neil Equity Research, will discuss global market conditions. He will give an update on the US market, in the latter stages of the 7-year bull run, and in the wake of the more recent July 2016 breakout. He will also look at the historical precedent of today’s post-election political climate and the effect on financial markets. In the developed and emerging space, Kenley will discuss leading and lagging countries exiting 2016, and bottom-up ideas entering 2017.
Market View
U.S. indices moved higher again this week, rising on the back of strong earnings results from major technology bellwethers and U.S. Focus List constituents Amazon and Alphabet. Money continues to flow out of Health Care and into large cap Technology as well as sharply improving sectors such as Transportation. We view ideas from the Technology sector as the true growth leaders of this current marketplace and continue to recommend hold-ing these ideas, despite some very strong moves already occurring.
Global Markets Still Without Direction, U.S. Sector Spreads Widen
Twenty-three developed markets lost 0.5% on average this week. Fifteen markets fell, including 11 (the U.S., the U.K., Germany, Australia, Sweden, Switzerland, Finland, Belgium, the Netherlands, Ireland, Portugal) by 1.0-1.9%. Seven markets gained, including Italy (3.5%) and Singapore (2.1%).
Most Markets Trade Higher, U.S. Small Caps at All-Time Highs
Twenty-three developed markets gained 1.1% on average this week. Twenty-one markets gained, including 13 by at least 1%, and six (Japan, Hong Kong, Australia, Belgium, Finland, Norway) by at least 1.7%. Switzerland and Ireland each fell slightly.
Market View
The U.S. market condition was upgraded to a Confirmed Uptrend. Strong price action across multiple indices and sectors has led to a reemergence of breadth in leadership ideas. All risk-on sectors are showing strength over the short-term (trailing four weeks), led by Transports, Capital Equipment, and Financials. Looking ahead, we would like to see the S&P 500 and Nasdaq break through resistance and into all-time highs, joining the Rus-sell 2000 and Dow Jones Industrial Average indices.
As U.S. Market Rally Continues, Retail Begins to Participate
Twenty-three developed markets gained 0.6% on average this week. Sixteen markets gained, including nine by at least 1%, and three (Japan, Canada, New Zealand) by at least 2%. Italy (-2.6%) was the sole market with significant losses.
Stock Breakouts Spike in the U.S., Emerging Markets Falter
Twenty-three developed markets gained 2.0% on average this week. Nineteen markets gained, including 14 by at least 2%, and nine (U.S., France, Germany, Australia, Sweden, Switzerland, Finland, Ireland, Austria) by at least 3.5%. Portugal (-1.3%), Spain (-0.4%), Denmark (-0.9%), and New Zealand (-0.2%) were the weekly laggards.
