Last week we discussed Japanese stocks hitting 33-year highs. And this week, the strength in foreign stocks continues, with Greece of all places making headlines. 👀
Let’s discuss what’s happening and see if investors will want a “pita the action.” 🫓
First, we’ll start with a weekly chart of the Global X MSCI Greece ETF ($GREK), one of the most popular vehicles offering direct exposure to the country’s stock market. As we can see from the chart below, prices are breaking out of the range they’ve been trapped in since 2015. Their last attempt in 2018 failed miserably, but they’re taking another shot at it five years later. 📈
Helping drive the breakout was election news from over the weekend. The country’s ruling New Democracy party doubled Syriza’s 20% of the vote. With that said, it’s projected to win just 145 seats in Parliament. That will leave it six short of an absolute majority. 🗳️
As a result, Greek President Katerina Sakellaropoulou is giving the three leading parties three days each to form a coalition government. If none are successful, a caretaker government will be appointed to prepare for a runoff election about a month later.
Ultimately, we’ll have to see how it plays out. But for now, the country’s stock market is pricing in a “positive result,” whatever that means. 🤷
So why does this matter? Developed markets outside of the U.S. have been strong recently. Greece’s breakout is just more evidence of that. And ultimately, bullish investors suggest that continued strength overseas will be a tailwind for U.S. markets since these global asset classes tend to move in tandem.
Whether or not that holds true remains to be seen, but for now, investors are welcoming Greece to the party. “Feta late than never,” we always say… 🥳