How This Bellwether Global Market Mirrors 2007
New records of financial optimism are being set in Europe and the U.S.
by Bob Stokes
Updated: December 03, 2020
You may recall the zeal with which many investors embraced many major global markets in 2007 – just as a big bear market was set to unfold.
One of those markets was German equities.
Now, here in the latter part of 2020, investors have once again jumped in with both feet.
Here's a chart and commentary from our November Global Market Perspective:
In October, Germany's Welt media published a version of this stunning chart, which depicts the behavior of German investors as they pushed a record €23.9 billion into the stock market over the first half of 2020.
The old record, which saw comparable buying interest, dates back to the last great investment mania in 2007. Investors [had] piled into the market long after the DAX had made its final highs. In fact, the DAX topped on July 13, 2007, with prices registering a slightly lower countertrend peak on December 12, 2007. Back then, in other words, complacency reigned for a full five months, as investors purchased shares under the mistaken belief that the old uptrend was intact.
Mistaken, indeed. Peak to trough, the DAX dropped 56% from 2007 to 2009.
Be aware that Europe is not the only continent where financial records are being set.
Let's travel across the Atlantic and take a look at what's going on with the IPO market in the U.S. This chart and commentary are also from the November Global Market Perspective:
Initial public offerings had two more big months in September and October. In October, 76 offerings came to market, exceeding the volume for any single month in 1999-2000, a period that is widely regarded as featuring the greatest IPO boom in history. This chart shows the new extreme.
Our Global Market Perspective discusses what these new extremes suggest for the weeks ahead. Plus, you'll also get coverage of 50-plus markets worldwide, including analysis of rates, metals, currencies (including crypto-currencies), energy and much more.
Follow the link below to start reading our Global Market Perspective now.
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It happens all the time: One market "pro" on financial TV explains why he is bullish, then a half hour later, an equally experienced "pro" offers reasons why she is bearish.
These opposing viewpoints are voiced about major financial markets all around the globe.
What's a global investor to do?
Forget the opinions and look to the price pattern of the market itself -- those patterns reveal a wealth of actionable information.
Learn what our 25-plus global analysts are telling subscribers about the next big moves in major markets around the world.
Get timely financial insights into China, Japan, Australia, India, Germany, the United Kingdom, the United States and many more countries.
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