Fourth of July, APAC Stocks Fly

Asia-Pacific stock indices are trekking higher while Europe and the Americas remain below their June highs.

First and foremost, I want to wish everyone a very happy Independence Day! As we take time this weekend to celebrate the birth of our nation, I wanted to point out a few key developments in the global equity space. Most importantly, the fact that Asia-Pacific stocks are breaching key resistance levels, while Europe and the Americas continue to trade below their June peaks.

The below is a chart of the Shanghai Shenzhen (CSI 300) stock index priced in the Chinese Yuan. The index saw the highest 3 day rate of change since April 2, 2019 and reached a new multi-year high today.

Take a look at the Taiwan Weighted Stock Index - less than a 2.5% move away from all-time highs! Semiconductors remain one of the strongest industries on the planet.

India’s SENSEX Index is also continuing to move in an uptrend from its March low. The 14 period Relative Strength Index is moving uniformly to price, printing higher highs and higher lows.

Hong Kong’s Hang Seng Index broke through a key layer of resistance this week. Closing above 25,200 for the first time since March 10th. This is no small feat and a very fashionable feather in the cap of stock bulls.

One very important APAC index that is yet to break above its June high, is Japan’s Nikkei 225 Index. If stocks are to continue higher, I’d like to see the world’s 3rd largest economy participate.

Taking a look at Europe and the Americas, with the exception of the Nasdaq 100, all remain below their June highs. This isn’t necessarily bearish evidence, but something to consider as we prime our portfolios for the second half of 2020.

I hope everyone has a terrific holiday - have fun, stay safe and thank God for the Red White & Blue!

SM