Transition Underway from Digital to Materials Era

Madonna was right. We live in a material world. What does this mean for investors in 2024 and beyond? Our October Global Market Perspective mines a few nuggets:

Viewing global asset classes through the lens of emerging markets provides a perspective that is often missed by analysts who focus on developed markets. That perspective, which is colored by the role that commodities play in the global economy, has been invaluable during the past several years. For example, it helped us to predict, in February 2020, the end of the 2008-2020 bear market in the Bloomberg Commodity Index to within 2% of its price low two months later and then to correctly forecast “enormous upside for commodities, price inflation and interest rates,” as we put it in September 2020, when the U.S. 10-year yield was 0.72%.

Here are the most important trends that are likely to unfold in global financial markets for the next decade or longer based on long-term Elliott wave patterns in various asset classes:

  • The global infotech sector, represented by America’s Nasdaq Index, is approaching the end of a five-wave advance that began in 2003.
  • The leading cryptocurrency, bitcoin, which accounts for about 60% of the total market cap of all cryptocurrencies, is approaching the end of a five-wave advance from 2008 in line with the five-wave advance in the Nasdaq.
  • As the intangible or digital assets enter the final years of their era of dominance, they have begun to pass the baton to physical or material assets.
  • The recent rise of gold, which is now the leading physical asset, marks it as the new bitcoin.
  • Gold’s breakout is also a bullish sign for emerging markets, which—like commodities—underperformed infotech after 2011.

Details matter. Our October Global Market Perspective gets super specific about how the transition from the digital era to the materials era presents opportunities in emerging markets. Follow this link so you can get a jumpstart on the crowd.

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