While there has been a great focus on the run-up of the largest American equities, the biggest European stocks have also been on the rise in recent weeks.  The STOXX 50 (FEZ) is made up of some of the largest companies by market capitalization in the broader Euro STOXX index.  In May and the first week of June, FEZ ripped higher before stalling out around 8.5% away from the January 1st 52-week high at $37.24.  After sitting below that June high for the rest of June and first half of July, FEZ is finally looking to make a new high today.  It is trading up over 2% pre-market which would send it over 1.5% above that June 8th high.

The STOXX 50 is also breaking out in terms of relative strength versus the US—S&P 500 (SPY)—based on where FEZ and SPY are trading pre-market. For most of the past year, FEZ has underperformed SPY as shown in the relative strength chart below.  That reversed sharply in May but the dynamic hit the pause button in June as the line trended sideways.  With FEZ up over 3% this morning and SPY up 1.35% pre-market, the relative strength line is looking to finally make a new high.

While FEZ has been outperforming a bit recently, on a year to date basis the US remains the better performer of the two.  In the first quarter SPY never fell as much as FEZ and the subsequent rally currently leaves SPY up on the year while FEZ is down just under 6%. The only day that FEZ had better performance YTD than SPY was on January 2nd.  Click here to view Bespoke’s premium membership options for our best research available.

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