Global Financial Data’s analysis of global markets gives a positive review for 2018.
Our review for 2017, “2017: Let the Bull Markets Continue,” hit the mark right on the spot. We noted that a “relatively large number of countries put in … a bear market bottom in 2016. Investors should expect that global markets will continue a bull market run in 2017.” And right we were.
Global Financial Data covers over 100 stock markets worldwide with over 100 years of data on bull and bear markets back to the 1800s. We keep track of the tops of bull markets and the bottoms of bear markets. A market top occurs when a peak is reached followed by a 20% decline. A market bottom occurs when a stock market hits a trough which is followed by a 50% or greater rise.
Data on market tops and bottoms for over 100 world markets is available through our Events-in-Time tool, and the summary numbers for global tops and bottoms are available through our GFD Indices.
By our count, there were 47 market bottoms in 2016 and only 2 market tops, giving a net score of -45. This was the lowest score global markets had seen since 2009 which had a score of -53.
It didn’t take artificial intelligence to figure out that 2017 was going to be a banner year.
2017 was a year in which all markets moved upward in sync. There wasn’t a single major market in the world that hit a bottom. The S&P 500 was up 19.4%, MSCI’s EAFE index was up 21.8% and MSCI’s Emerging Markets were up 34.3%, and that was before dividends! 2017 was one of the best years in the 21st Century.
Part of the problem from American investors’ perspective was that even though many European and Asian markets hit a bottom in 2016, the United States did not since it has been a global market leader since the Great Recession of 2009. US markets did sell off in August 2015 when Brexit was approved by the British electorate, but the market put in a double bottom in January 2016, and the trend has generally been straight up since then.
In 2017, five markets hit a bottom and three markets hit a top. None of the markets hitting a top or bottom was a major world markets. The five hitting tops were Bosnia-Herzegovina, Côte d’Ivoire, Nepal, Qatar and Tanzania. The three hitting market tops were Iraq, Mongolia and Pakistan. Only 2018 will tell whether these nine markets bounce back.
And the forecast for 2018?
High numbers of markets hitting bottoms exceeding the number of markets hitting tops only happens every five to seven years. During this century, this occurred in 2003, 2009 and 2016, so this data generally portends positively for global markets for the rest of the decade.
2018 will probably be more volatile than 2017, but there is little reason to believe that 2018 and 2019 won’t be a great time for investors worldwide. Our advice, ignore volatility and stay in the market for 2018. We’ll let you know how our prediction went in a year.
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Our comprehensive financial databases span global markets offering data never compiled into an electronic format. We create and generate our own proprietary data series while we continue to investigate new sources and extend existing series whenever possible. GFD supports full data transparency to enable our users to verify financial data points, tracing them back to the original source documents. GFD is the original supplier of complete historical data.
