Western Europe equity and AI as predictors for US equity 6 months out

For US three equity index ETFs QQQ, SPY and DIA, the top two common causal predictors for their prices in 6 months’ time are computed as

• SPDR EURO STOXX 50 ETF (Western Europe equity)

• Microsoft MSFT (Partner of OpenAI, maker of ChatGPT)

The following three causal predictors showed generally three different kinds of stock prices’ behaviour under the high US interest rates.

• Incite INCY (pharmaceutical, stock price remains flat)

• Marriott MAR (international hotel chain, symbolising consumer discretionary spending, stock price trending up with occasional corrections)

• S&P Dividend ETF SDY (a basket of everyday necessity manufacturers in the west, from toothpaste to cars, SDY is at all-time high)

To visualise the above results, visit tsterm.com and type "QQQ.US;SPY.US;DIA.US" without the quotation marks.

The rallying Western European equity and AI stocks are consistent with the recount of stock prices’ behaviour in the Reagan era (“Equities at Global Level” I and II), fuelled by inflation and funded by a widening deficit.