February 1, 7:00 pm EST

Rates continue to run higher.  As we’ve discussed, the move higher in rates is likely to stifle the runup in stocks, until we start seeing the fiscal stimulus benefits reflected in the data.  That will be a couple of months away.

Globally, there are already some technical signals indicating a lower path for stocks (NYSE:SPY).

Here’s a look at China …

Chinese stocks (NYSE:FXI) ran up over 8% and have already given back 4% in just four days (marked by an outside day at the top).

Japanese stocks (NYSE:DJX) have soared 25% just in the past four months.  And this big trend broke down just a few days ago.

German stocks are 4.5% off of record highs just over the past nine days.

And stocks in the UK were the first to top out in the middle of January, now off almost 4% from the record highs.  Canadian stocks are down 3.3% in the past week, from record highs.  Both the Bank of England and the Bank of Canada are already on the move on normalizing interest rates.

This all continues to look like a world that is pricing in the end of QE, as we’ve discussed.  And it’s happening because fiscal stimulus in the U.S. is expected to lift all boats, leading ultimately to major central banks and governments following the path of the U.S. — exiting emergency monetary policy, and stoking the recovery by adding fiscal stimulus.

Ultimately, that gives the global economy the best chance to sustainably recover from the economic slog of the past decade.   But again, expect the “prove it to me period” to be coming (if not underway) for stocks, waiting to see the better growth justify the “end of QE” theme.

With this in mind, we had some spotty earnings from the stock market giants after the bell: Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).  The FAANG trade is up 15% this year alone, and up huge since the election (about 75%).  But remember, the administration’s regulatory outlook isn’t so favorable to the tech giants.  We may some cracks in the armor starting to show.     

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