Is the bear market ending?

Is a new global bull market under way? The question might seem premature. Although the MSCI World index has enjoyed a strong start to 2023, a cursory glance at a chart shows the downtrend remains not just intact, but obviously so.

This is especially true of the world’s biggest market, the US, which remains roughly 17 per cent below last year’s peak.

Outside the US, however, the picture looks brighter. More than 70 per cent of international markets are above their 200-day moving average – the most since November 2021, notes All Star Charts’ Willie Delwiche. After hitting two-year lows in October, the MSCI Emerging Market index has rebounded by over 20 per cent.

This “new bull market” behaviour is associated with longer-term gains, says SentimenTrader’s Jason Goepfert.

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European stocks, buoyed by easing energy prices, better-than-expected economic data and China’s reopening, have been especially strong. Europe’s Stoxx 600 has hit its highest level since May. Germany’s Dax has rallied 25 per cent and is just 7 per cent below all-time highs. France’s Cac 40 has enjoyed a similarly strong rally and is even closer to all-time-high territory. In the UK, the FTSE 100 is on the cusp of overtaking 2018′s all-time high.

In the US, says Bespoke Investment, many investors are asking if October’s market lows will hold in 2023. In contrast, investors in Europe are “shifting their focus and asking if 2023 will be a year of new highs”.