EAFE Forecast: Breakout Confirmation Is Finally Here
International stocks are showing signs of stabilization. Following a period of aggressive selling tied to oil, the EAFE index has found support and is showing early signs of a rebound as geopolitical concerns begin to ease. Fundamentals appear steadier than expected and price action is improving, suggesting that overseas markets could see a sustained period of recovery.
Developed international stocks, think the MSCI EAFE index, were hammered by the looming energy crisis that followed the closure of the Strait of Hormuz. The selloff was sharp and fast. But it looks like the floor is in. Momentum is rolling over, and the index is holding a key technical level, supported by news of potential U.S.-Iran peace talks on the 31st. Markets are starting to price in an endgame, and that’s a bullish signal. Macro uncertainty around a Middle East peace deal still warrants some caution, but the technicals are giving a clear read: it’s time to buy international.