'Rest Of World' Equities Finally Break Out

International equities, historically underperforming for the past two decades, have recently broken out to new all-time highs, surpassing two key resistance levels within the last month. This significant technical development signals a potential reversal in a long-term trend, warranting investor attention to this asset class.

Analysis

International equities have registered a significant technical event, breaking out to new all-time highs within the last month. This development is particularly notable as it concludes a prolonged twenty-year period of underperformance, suggesting a potential major shift in market dynamics. The breakout has successfully cleared two key historical resistance levels, a strong technical signal that often points to a potential trend reversal and the start of a new secular bull market. The bullish nature of this price action, as highlighted by a strongly positive sentiment score, could attract momentum-driven capital flows, further reinforcing the upward move.

Key Decisions for Investors

• Investors should review their strategic asset allocation, as the breakout may justify increasing exposure to international equities after a long period of underperformance.
• It is prudent to monitor whether these new all-time highs can be sustained, as a consolidation above the former resistance levels would confirm the strength of the new uptrend.
• Consider this breakout as a potential theme for enhancing portfolio diversification and capturing alpha, especially if capital flows begin rotating away from previously leading markets.