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Equity and commodities prices around the world are pointing to one thing — the re-emergence of global growth. That likely means that equity prices in the US will continue to rise. I focus on many of these global markets in the morning commentary, but I think when we look at all of these markets together they paint an overwhelmingly bullish picture in my opinion.
Japan – Nikkei
The Nikkei in Japan continues to rise and just this week rose above a significant trend line which it had broken during the December sell-off. For now, the index still has further room to rise and is heading towards 22,000.
South Korea
The KOSPI continues to rise, and this week it would seem that the index broke out rising above 2,225. The chart would suggest that there is perhaps another 6% for the index to increase in the coming weeks.
Australia
One market we haven’t focused on is Australia, which is just 3.5% below its August highs. The country is an exporter of commodities and is heavily tied to China. Should the ASX200 get over a resistance level at 6,200, the index is likely to climb back to the highs August.
Iron Ore
One of Australia’s biggest export to China — Iron Ore. The price of the metal, a critical ingredient for making steel, has risen rise nearly 50% to $90 from the $60s in November.
Copper
Copper, of course, has been on the rise in recent weeks which I have noted on many occasions.
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[youtube-feed feed=7]Silver
Silver is another industrial metal on the rise. Believe it on not, according to geology.com, 35% of silver’s use goes to electrical and electronic products. The metal is on the cusp of a big break out as well. Silvers sharp decline started in the early summer around the same time as copper and many of the export-driven stock markets.
Lumber
While the outlook for Lumber seems less certain. The chart does have what looks to be a cup and handle pattern, which would suggest higher prices may be on the way.
When we start looking at a complete picture it is hard to argue the global economy is getting worse. If that were there the case, these stocks and commodities would be heading lower, not moving higher. If the economic outlook stabilizes and continues to improve then, that would at least suggests that earnings growth has likely bottomed and is likely to rebound in the coming months. That is very much a bullish indicator for stock.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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