The MSCI World stock market index set a new all-time record during the trading session of Monday June 2, wiping out the entire stock market shock of February/March, which saw the global equity market lose 20%. This technical signal still needs to be confirmed at the end of the week at the next weekly technical close. If this bullish technical break were to be confirmed, then this would be a very positive signal for the global equity market, which is still hoping that trade diplomacy will lead to solid trade agreements between the USA and its main trading partners (China and the EU).
The chart below shows the weekly Japanese candlesticks of the MSCI World index.
1) Composition and calculation of the MSCI World index
The MSCI World Index (Morgan Stanley Capital International World Index) is a benchmark stock market index that measures the performance of large- and mid-cap equities in developed countries. Here are the main elements of its composition:
The MSCI World Index is a benchmark global stock market index that measures the performance of large- and mid-cap equities in 23 developed countries. Created by Morgan Stanley Capital International, it offers a global view of the equity markets in the most advanced economies. Among the countries included are the United States, Japan, the United Kingdom, France, Germany, Canada and Australia. The index comprises some 1,600 companies, with a strong dominance of the USA, which accounts for almost 70% of its total weighting. The most represented sectors are information technology, healthcare, financial services and consumer discretionary.
The MSCI World is calculated using a weighting method based on free-float market capitalization, i.e. taking into account only those stocks actually available for purchase on the markets. This means that companies with a higher market value and a larger free float have a greater influence on the index's performance. The MSCI World is updated regularly to reflect market developments and the entry or exit of companies.
Although it offers broad geographic diversification, it does not include emerging countries; these are covered by the MSCI ACWI index, which is also close to setting a new all-time record and is 13% composed of emerging countries (China, India, etc.).
2) Trade diplomacy and the FED's monetary policy outlook are key to keeping the global equity market bullish in the months ahead.
Trade diplomacy and the FED's monetary policy outlook are closely linked fundamental factors which have a direct impact on global equity market trends.
While the US inflation rate continues to trend towards the FED's 2% target, the FED is waiting for trade agreements to be signed to ensure that the risk of a second wave of inflation is averted, so that it can resume cutting the US federal funds rate.
These two fundamental conditions are essential if the global equity market is to confirm its new record highs over the coming months.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
The chart below shows the weekly Japanese candlesticks of the MSCI World index.
1) Composition and calculation of the MSCI World index
The MSCI World Index (Morgan Stanley Capital International World Index) is a benchmark stock market index that measures the performance of large- and mid-cap equities in developed countries. Here are the main elements of its composition:
The MSCI World Index is a benchmark global stock market index that measures the performance of large- and mid-cap equities in 23 developed countries. Created by Morgan Stanley Capital International, it offers a global view of the equity markets in the most advanced economies. Among the countries included are the United States, Japan, the United Kingdom, France, Germany, Canada and Australia. The index comprises some 1,600 companies, with a strong dominance of the USA, which accounts for almost 70% of its total weighting. The most represented sectors are information technology, healthcare, financial services and consumer discretionary.
The MSCI World is calculated using a weighting method based on free-float market capitalization, i.e. taking into account only those stocks actually available for purchase on the markets. This means that companies with a higher market value and a larger free float have a greater influence on the index's performance. The MSCI World is updated regularly to reflect market developments and the entry or exit of companies.
Although it offers broad geographic diversification, it does not include emerging countries; these are covered by the MSCI ACWI index, which is also close to setting a new all-time record and is 13% composed of emerging countries (China, India, etc.).
2) Trade diplomacy and the FED's monetary policy outlook are key to keeping the global equity market bullish in the months ahead.
Trade diplomacy and the FED's monetary policy outlook are closely linked fundamental factors which have a direct impact on global equity market trends.
While the US inflation rate continues to trend towards the FED's 2% target, the FED is waiting for trade agreements to be signed to ensure that the risk of a second wave of inflation is averted, so that it can resume cutting the US federal funds rate.
These two fundamental conditions are essential if the global equity market is to confirm its new record highs over the coming months.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.