FTSE 100 Long Term Indicator For Global Markets

TL;DR

The long-term outlook for global stocks, represented by the FTSE 100, is either a bear market or a multi-decade bull market, depending on its position relative to the 7,000 level.

Transcript

hello my name is Jonathan Davis and I present the booms and busts podcast which you can get on audio boom iTunes and so on and today I'm going to start off by talking about the the long-term outlook for in this case the fitzy 100 but that actually is a good proxy in any case for global stocks there's a handful of stock indices around the world that... Read More

Key Insights

• 🙊 The FTSE 100 and other global stock indices have experienced major peaks and collapses in the past two decades.
• 🌐 Reflationary trends in the global economy are currently impacting global stocks.
• 🎚️ The recent pullback in 2018 was a retest of the breakout of the 7,000 resistance level.
• ✖️ The FTSE 100's position relative to 6,800-7,000 determines the market outlook, with prospects of a bear market or a multi-year/multi-decade bull market.

Questions & Answers

Q: What are the key events that have influenced the FTSE 100 and global stock markets in the past two decades?

The dot-com peak in 1999, followed by the dot-com bust, the financial crisis in 2007-2008, and subsequent quantitative easing, zero interest rate policy, bailouts, and the boom in technology stocks since 2009 have all had significant impacts on the FTSE 100 and global stock markets.

Q: What trend is the global economy currently experiencing, and how does it affect global stocks?

The global economy has transitioned from falling inflation and deflation to global reflation. This reflationary period is impacting global stocks, and the recent pullback in the second half of 2018 can be seen as a retest of the breakout of the 7,000 resistance level.

Q: How can the FTSE 100's position relative to 7,000 determine the market outlook?

If the FTSE 100 falls below 6,800-7,000, it suggests a bear market that likely started in September 2018. However, if it remains above 7,200-7,400, it indicates a potential bull market. The chart suggests the possibility of a multi-year or even a multi-decade bull market.

Q: What historical evidence supports the idea of a multi-decade bull market for global stocks?

By analyzing the S&P chart over the past hundred years, there is a recurring pattern of periods of flat movement followed by upward movements. The current projection suggests that the market will continue to rise for the next fifteen years.

Summary & Key Takeaways

• The FTSE 100 and other global stock indices have experienced significant booms and busts over the past two decades.

• Global reflation is currently impacting global stocks, with a retest of the breakout of the 7,000 resistance level in the second half of 2018.

• If the FTSE 100 falls below 6,800-7,000, it suggests a bear market, but if it remains above 7,200-7,400, it indicates a potential multi-year or multi-decade bull market.