Last year was volatile. Emerging markets and Europe has serious losses. The U.S. was trendless on the year ‘neutral’. This brings up the question where global stock markets are headed in 2019. To answer this question we look 10 global stock market sector trends in 2019. This approach gives somehow more color to the 15 leading indicators, a section we started in 2019 to determine the dominant trend.
In order to get an understanding of where global stock market sectors are headed in 2019 we leverage the iShare global ETF by Blackrock. This is one of those many instances where we may are looking into ETFs not necessarily because we are interested to buy them but primarily to understand trends.
Visibly, 3 sectors stand out when it comes to the bullish chart setup: technology, healthcare, industrials.
From the 10 global stock market sectors we review in this article we identified 3 sectors that are lagging: Financial, Energy and Utilities. We are not interested in why these 3 sectors behave like this, nor will we look into fundamentals. The chart says it all, and we have to respect the chart and the trends on the charts.
As per our 100 investing tips:
The chart is crucial, and it is the most factual and data driven way to look at any market. That’s why we apply the ‘start with the chart’ principle. It means we first identify trends and opportunities in assets or markets based on chart patterns, only to consider this as green light to look into fundamentals and, when relevant, financials. So first the chart, then fundamentals.
Still, interestingly, financial media has been all over the place with concerns about global stocks and global growth. Some recent examples to illustrate this:
- If you’re worried about stocks, invest in gold here, Jim Cramer says, published on CNBC
- Forget the stock market, you should really be worried about your job, says MarketWatch
- FAANG Stocks Fall As Concerns About Growth In Sector Continue according to Investors Business Daily
- U.S. Stocks Regain Ground Despite Concerns About Global Growth published by the respected WSJ
- There’s a looming threat for the stock market and it has nothing to do with China says CNBC
This type of news stream certainly seduces any investor to push the ‘sell’ buttons. Still, this is not reflected in the charts. InvestingHaven neutralizes all this by its mantra ‘start with the chart’.
So let’s stay factual, and look into the trends on the charts of 10 global stock market sectors which is much more valuable and relevant than this endless stream of concerning (confusing) news.
10 Global Stock Market Sectors Trends In 2019
Global stock market sectors in 2019: Financials
The weekly chart of iShares Global Financials ETF (IXG) shows a gradual increase of prices towards the 2008 major top. So far we see 2 mid term downtrend lines that were followed by breakouts. At the time of writing global financial stocks are still in the running for another breakout similar to the previous 2 instances.
The odds favor that the global financial stock market sector moves higher in 2019.
Global stock market sectors in 2019: Technology
The iShares Global Tech ETF (IXN) made a bottom after finding support at the uptrend line. As long as its price does not break below the uptrend line we maintain our mid-long term bullish stance. However, should price break the uptrend line it would be eyeing the purple horizontal zone is considered next major support.
The odds favor that the global technology stock market sector moves higher in 2019.
Global stock market sectors in 2019: Healthcare
The iShares Global Healthcare ETF (IXJ) has just tested its horizontal support which was resistance previously. This happened to coincide with the uptrend line. So long as price does not break below the uptrend line/horizontal support this sector remains healthy.
The odds favor that the global healthcare stock market sector moves higher in 2019.
Global stock market sectors in 2019: Industrials
The iShares Global Industrial ETF (EXI) has a price action which is similar to the global material sector (see above) where price broke above major resistance of a giant triangle. It then retraced, and found support at former resistance. However, the big difference is that this formation is an ascending triangle compared to the symmetrical triangle that is registered on the global materials (MXI) chart. There is an argument to be made that when the industrial sector grows the demand of materials will rise accordingly.
The odds favor that the global industrials stock market sector moves higher in 2019.
Global stock market sectors in 2019: Materials
The iShares Global Materials ETF (MXI) monthly chart registered a giant price breakout around the summer of 2017. The downtrend line of a massive triangle got broken to the upside, and price went straight up for roughly 6 months before it hit major resistance. It then plunged back to the upper line of the triangle where it did find major support.
It is too tough to forecast the global materials stock market sector in 2019 at this point in time but given the correlation with industrials the odds favor materials to move higher in 2019.
Global stock market sectors in 2019: Consumer Discretionary
The iShares Global Consumer Discretionary ETF (RXI) shows a higher high and higher low uptrend. Price found a bottom recently, and confirmed the horizontal support at the purple zone. This is a rising pattern that is still intact.
The odds favor that the global consumer discretionary stock market sector moves higher in 2019.
Global stock market sectors in 2019: Constumer Staples
The iShares Global Consumer Staples ETF (KXI) has a prolonged horizontal sideways formation. This is in line with the thinking that in a growing economy consumer staples moves slower than consumer discretionary.
Note that the see an inconsistency between this chart and what insitutions and media are propagating. Recently, we heard insitutions like the World Bank, IMF and many gurus forecasting how bad economic conditions might become. Again, news and charts are not in synch.
The odds favor that the global consumer staples stock market sector is flat in 2019 primarily because of its correlation with consumer discretionary in good economic conditions.
Global stock market sectors in 2019: Energy
There is a reason to be concerned about the global energy sector. The iShares Global Energy ETF (IXC) shows its price lingering at major horizontal support of the consolidating triangle. And this could be the biggest sector divergence amongst all 10 stock market sectors we discuss in this article.
In case a major break below the lower triangle line of support would take place it might trigger another stock market meltdown.
We refrain from a prediction about the global energy stock market sector in 2019.
Global stock market sectors in 2019: Utilities
Although iShares Global Utilities ETF (JXI) is lagging behind it is not very far away from bullish conditions. A break above this major purple resistance bar would turn utilities strongly bullish.
Global stock market sectors in 2019: Real Estate
We often hear that the property or real estate market is in a bad shape. The iShares Global Real Estate ETF (CGR) chart tells us a very different story. Price has been in a consolidation for almost 4 years since Dec 2014. However, the global real estate stock market sector is poised to launch yet another attack towards major resistance (see purple rectangle). A break above this major resistance spells the continuation of the previous uptrend. However, another rejection means more sideways trading for a couple more months at a minimum. Unless price breaks down below the purple rectangle there is no reason whatsoever to be concerned.
The article is educational in nature, it should not be construed as a solicitation to invest or trade the underlying ETF mentioned in the article.
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