I am going to start with honesty: the Belgian stock market has been quite disappointing over the last couple of years. It hasn't really been able to keep up with its peers in Europe, and today, it is still lagging behind by quite a margin. Yet, we could thankfully see some change in this trend. It is in the process of confirming a very important milestone, surpassing the 2021 highs.
This could have some positive implications for global equities. There's been lots of fear regarding Trump's tariffs, deflation, war, and their impact on global financial markets. One thing seems certain: it is currently way overblown. If the BEL20 breaking out tells us anything (an index that hasn't done much in terms of performance) it's that we should all continue to just follow the trend and stop being so fearful.
I've added a chart of the index below. We can clearly see it in the process of completing a nearly five-month-long base. A confirmed breakout here would make it difficult to be bearish on global markets. The only thing we have to keep in mind is the 2021 highs, which could influence market perception among investors. We can see this clearly on the weekly chart later in the post.
Take a look at the weekly chart—preferably, we want to see a move closing beyond 4.4k before we can be sure of a continuation of the uptrend in Belgian equities. The 2021 highs are definitely a big hurdle that needs to be cleared, but the strength is there.
Take a look at the comparison between the BEL20 and the other major indices in Europe. It's been lagging behind by a margin. Belgium has a lot of catching up to do, which is why this might be a good time to take some profits out of, for example, German stocks and funnel them into Belgium.
In a nutshell, why be scared of all this news about tariffs, sticky inflation, and war? Everything is moving in a healthy uptrend for now. Could this change in the future? Sure. But predicting when this will happen is a fool's game. All we can do as speculators is to keep following the trend and keep our risk management tight.
Think about it, we could sit here and endlessly debate the effects of U.S. tariffs on the global economy, but it’s a useless endeavour. We’re not economists. We don’t get paid to analyse how tariffs impact the global economy. The market is going up, and as investors or traders, that’s the only real factual data point we have. Everything else is just baseless prediction. Sometimes, playing the stock market is easy, the problem is people trying to make it difficult. It’s perfectly fine to occasionally think like a Neanderthal in the markets: price goes up, good; price goes down, bad.
So, what do you think? Is a breakout of the BEL 20 index a good sign for the global market? Or is it the last push before a bear market sets in? Let us know!