0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/Twr44cZ1GB https://t.co/6b3JtrSQnP
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT to learn about how you can become a better trader. Register here: https://t.co/WeWGKtdlyz https://t.co/4hIQtGPL0N
  • Gold Prices May Resume Selloff After Digesting Largest Drop in 7 Years - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/08/13/Gold-Prices-May-Resume-Selloff-After-Digesting-Largest-Drop-in-7-Years.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #XAUUSD #gold https://t.co/aWOvE1KJXc
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.83%, while traders in US 500 are at opposite extremes with 77.46%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/EQ77jevtaX
  • Heads Up:🇫🇷 IEA Oil Market Report due at 08:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-08-13
  • Hey traders! I'm sure you've all heard about trend trading. Sharpen your knowledge here: https://t.co/jkliL5sxj7 https://t.co/QPW1os7wbE
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Silver: 0.98% Gold: 0.60% Oil - US Crude: -0.18% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/gDZGfvBOHv
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.31% 🇨🇭CHF: 0.22% 🇬🇧GBP: 0.21% 🇦🇺AUD: -0.01% 🇨🇦CAD: -0.03% 🇳🇿NZD: -0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/9IwXKOUieT
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.16% US 500: -0.17% Germany 30: -0.24% France 40: -0.50% FTSE 100: -0.96% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/MtMyrT3zZY
  • Heads Up:🇨🇳 FDI (YTD) YoY (JUL) due at 07:00 GMT (15min) Previous: -1.3% https://www.dailyfx.com/economic-calendar#2020-08-13
Is the S&P 500's Strength in Global Equities an FX Advantage?

Is the S&P 500's Strength in Global Equities an FX Advantage?

2016-08-02 02:21:00
John Kicklighter, Chief Strategist
Share:

Talking Points:

  • The S&P 500 stands at record highs while many of its global counterparts are well off their own highs
  • Germany's DAX is 17% off and UK's FTSE 100 is down 6% from their record highs, Japan's Nikkei is 21% off 20yr highs
  • Aside from FX influence, key considerations for disparity in performance can be growth, yield forecasts, speculation

Having trouble trading in the FX markets? This may be why.

The S&P 500 has consolidated these past weeks at record highs. Its international counterparts are significantly lower than respective historical or generational highs. While some disparity in performance is to be expected, the contrast between US and the international equities performance is remarkable given the globalization of the markets and the ready transmission of speculative appetites through boarders and asset boundaries.

One of the first considerations to come to mind is that the US stock benchmarks benefit from a strong local currency. However, when we adjust the global indexes to exchange rate influence (back to the Dollar) there is limited support for this this assessment. With the exception of the UK's FTSE 100 seeing an incredible adjustment to the Brexit fallout that drove the Pound over 12 percent lower versus the Dollar in a span of two days; the standings change little. That leaves other explanations that are less quantitative and likely share responsibility.

Relative growth potential, current yield, expected future yield, favorable regulation, structural rehabilitation, stronger business cycle and revenues are the traditional sources of relative strength we would attribute this skew. While that may contribute to relative value; the fact that the market stands at record highs when US economic conditions don't measure up to its own historical performance levels suggests there is a more prominent - if errant - factor. A combination of risk appetite and the world's devolving into competitive monetary policy likely accounts for the bulk of the S&P 500's strength. But, those make for an unstable foundation. We discuss this global market contrast in today's Strategy Video.

To receive John’s analysis directly via email, please SIGN UP HERE.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.