Below are a few noteworthy charts mostly pulled from last Friday’s Bespoke Reportnewsletter.  To view the full report and start accessing Bespoke’s investment research going forward, sign up for a free trial to Bespoke Premium.

First up is the S&P 500’s cumulative A/D line, which has been making new highs even though the index’s price has yet to make a new high.  This is a great example of a bullish divergence in underlying breadth.

While large-cap breadth is strong, it’s the opposite story for the small-cap Russell 2,000, where the cumulative A/D line is nowhere near its 2018 highs yet.

After a period of outperformance in early 2019, small-caps have reverted back to their multi-year trend of underperformance versus large-caps.

European stocks have experienced huge upside momentum lately, and underlying breadth is confirming the move as the Euro STOXX 600 cumulative A/D line just made a new one-year high last week.

European economic data has also been surprising to the upside (versus economist estimates) over the last two months, which has caused Citi’s Economic Surprise index for Europe to jump.  Surprise indices for the rest of the world remain more subdued.

As mentioned above, European stocks have been hot lately.  A snapshot of regional ETFs from our Trend Analyzer tool shows that European equity ETFs are more overbought than any other area of the world right now.

And by the way, China’s equity market is also seeing very strong breadth to go along with the Shanghai Composite’s rally.

Getting back to the US, the chart below shows that the yield curve is ticking closer and closer to the flat-line.  Keep an eye on this one (just like everyone else).

Nothing tells the story of “Fed on hold” like the chart below, which shows market priced odds of Fed Funds rate moves by January 2020.  Back in November 2018, there was a 90% chance of rate hikes by January 2020, but now those odds are at 0%.  The probability of no change between now and January 2020 is at 60.4%, which is down from a reading above 80% just a few weeks ago.  Where the needle is moving higher is at the odds of a rate cut.  As shown, odds of a rate cut by January 2020 are now at 39.6%.  Those odds were just barely above 0% back in November.

And finally, you may be surprised to see that the amount of negative yielding debt around the world is on the rise and above $9 trillion once again:

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Have a great Day!