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Global Stock Markets: Keep Your Eye on This Remarkable “Divergence”

Incredibly, the Stoxx 600 is lower today than it was in March 2000

by Bob Stokes
Updated: September 24, 2020

As you probably know, a "divergence" occurs when one financial market behaves differently from a related financial market.

Such occurrences often portend trend changes, albeit, divergences may stretch out for months before a trend change occurs.

Remarkably, one global divergence has been unfolding for more than 20 years!

Our September Global Market Perspective tells the story with this chart and commentary:


Incredibly, Europe's broad market has made no net progress over the past 15 long months, as this chart of the past 25 years shows. More incredibly, the Stoxx 600 is lower today than it was in March 2000, almost 21 years ago. Perhaps most incredibly, however, is that the great U.S.-European stock market divide has grown even wider. The S&P 500, in fact, has more than doubled since March 2000 and more than quintupled since the last financial crisis ended in March 2009.

Can this 20-plus year divergence continue?

Well, here's what U.S. News & World Report had to say on August 4:

Europe May Finally Be Compelling for Investments

It's time for U.S. investors to change their outlook on European investments.

On August 9, the Wall Street Journal expressed a similar sentiment:

Why It Might Be Time to Invest in Non-U.S. Stocks

U.S. stocks have been the better bet for a decade. With those valuations now so high, the question is whether it makes sense to shift some exposure overseas.

Our Global Market Perspective provides its own analysis of the divergence, which includes an explanation of why the performance of the Japanese stock market of the 1980s is relevant.

In addition, you will find Elliott wave analysis of the main stock index of Europe's largest economy -- plus, coverage of more than 40 markets worldwide.

Prepare now for anticipated financial trend changes on a global scale.

Fooling Investors at Crucial Junctures: Global Stock Markets Always Find a Way

It has happened again and again throughout global market history.

Why? Because anywhere you go around the world, the patterns of investor psychology never change.

Know that Elliott waves directly reflect this investor psychology. So, knowledge of our current Elliott wave analysis of worldwide equity markets can help put you on the right side of trend changes (yes, key global markets appear to be at "crucial junctures").

Our monthly Global Market Perspective offers in-depth analysis of the U.S., Asian-Pacific, Europe and more.

Get details by following the link below.


German Stocks: “… on the brink of a very dramatic decline”

The strong recent decline in Germany's DAX has many investors worried -- after all, the DAX is Europe's equivalent of the DJIA. Now see how a simple Elliott wave price formation guideline -- first discovered by R.N. Elliott almost 100 years ago -- warned of the DAX's bearish opportunity as early as October 14. Our European Short Term Update editor explains.

What We See in the Stock Market

On Friday October 23rd, The Short Term Update noted the recent "lower lows and lower highs" - and told subscribers to keep an eye on 28,040 in the Dow, saying a break could come "very early next week." See the chart and forecast for yourself.

What This Survey Reveals About Investor Sentiment

Many retail and professional investors remain bullish on the stock market -- even after a multi-month rally. Get insights into a recent investor survey -- plus, see a chart which shows how the current optimism matches up with similar levels of optimism in the past.