Even though US stocks as gauged by the S&P 500 are near their all-time highs, trends under the surface are deteriorating ever so slightly. In Europe and especially in the Pacific, however, the opposite is happening.
Below we show three charts per MSCI developed market region showing various measures of breadth and momentum. The first chart in each group is the percent of stocks making new 65-day highs in USD terms (an intermediate term indicator of participation in new highs in the overall stock market), the percent of stocks whose 50-day moving average is higher than the 200-day moving average (a momentum indicator) and the percent of stocks above their own 200-day moving average (another breadth indicator).
From a quick perusal of the charts we can easily see that breadth and momentum among North American stocks has deteriorated a bit while those same trends in Europe and the Pacific have improved a bit. In Europe, stocks are recovering modestly from the sharp selloff in the second half of 2014. European stocks in USD terms are still well below their old highs. In the Pacific region, stocks appear to be breaking out to new cycle highs while accompanied by strong breadth. This is a very positive combination. YTD the MSCI Pacific has outperformed the MSCI World Index by 5.6% and the MSCI Pacific Health Care sector has outperformed by 16.3%.