How Long Can Central Banks Keep This Rally Going? Global Financial Stress Is Starting To Grow, U.S. Consumer Confidence Plunges As New Home Sales, Richmond Fed Miss, BRIC ( Brazil, Russia, India & China) and Emerging Markets Are Close To Or Are Breaking Key Support Lines!
March 26th, 2013
Global Financial Stress Is Starting To Grow, And That’s Bad News For Stocks
Global financial stress, a coincident indicator for global stock prices, is flaring up again in the wake of the crisis in Cyprus.
The blue line on the chart below shows BofA Merrill Lynch‘s Global Financial Stress Index turned upside down to illustrate how it correlates with global equities, proxied by the MSCI All Country World Index (the red line).
While global equities have started to roll over a bit, global financial stress has spiked upward pretty forcefully in the past few weeks.