Summary
International stocks are beginning to stabilize after a tumultuous period characterized by aggressive selling, particularly influenced by an energy crisis stemming from the closure of the Strait of Hormuz. The EAFE index, which tracks developed international stocks, has found a support level and is showing early signs of a rebound as geopolitical tensions ease.
Market Conditions
The recent selloff in the EAFE index was sharp and rapid, driven by fears surrounding the energy crisis. However, the market appears to have reached a floor, with momentum indicators suggesting a reversal. The index is currently holding a crucial technical level, buoyed by news of potential peace talks between the U.S. and Iran, which occurred on March 31st. This development has led markets to start pricing in a possible resolution, which is interpreted as a bullish signal for international stocks.
Outlook
While macroeconomic uncertainties related to a Middle East peace deal still warrant caution, the technical indicators are increasingly suggesting that it may be an opportune time to invest in international markets. The combination of stabilizing fundamentals and improving price action indicates that a sustained recovery could be on the horizon for overseas markets.