Global anchor · Assets · Stock Markets
72warm
Positions of 20 national stock markets, weighted by market value | Data for Sep 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
The positions of major national stock markets, averaged with weights by total market value (our calculation).
It shows whether world stock markets as a whole are running warm or cool. The US accounts for about half the weight.
Public substituteWe use this in place of “MSCI World and Emerging Markets indices”. MSCI indices are share price indices compiled by an index provider and weighted by market value; this site’s world stock reading combines each national market’s own position from cold to hot, weighted by market value, and is not a share price. They tend to point the same way, but their numbers and meaning differ. They measure similar things, but they are not the same number.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also warm
| Economies | Market-cap share | Percentile | Level | Data month |
|---|---|---|---|---|
| South Korea | 2.2% | 99 | hot | Sep 2026 |
| Canada | 3.6% | 96 | hot | Sep 2026 |
| Poland | 0.2% | 93 | hot | Sep 2026 |
| Chile | 0.4% | 91 | hot | Aug 2026 |
| Japan | 6.0% | 89 | hot | Sep 2026 |
| Spain | 1.0% | 89 | hot | Sep 2026 |
| Israel | 0.3% | 87 | hot | Sep 2026 |
| Italy | 0.5% | 81 | hot | Sep 2026 |
| US | 54.0% | 78 | warm | Sep 2026 |
| Germany | 2.3% | 72 | warm | Sep 2026 |
| China | 12.1% | 68 | warm | Sep 2026 |
| Türkiye | 0.3% | 68 | warm | Sep 2026 |
| South Africa | 1.1% | 58 | neutral | Sep 2026 |
| UK | 2.4% | 58 | neutral | Sep 2026 |
| Switzerland | 2.0% | 56 | neutral | Sep 2026 |
| Australia | 1.6% | 44 | neutral | Sep 2026 |
| Brazil | 0.7% | 44 | neutral | Sep 2026 |
| India | 8.3% | 34 | cool | Sep 2026 |
| Mexico | 0.4% | 20 | cold | Sep 2026 |
| Indonesia | 0.7% | 3 | cold | Sep 2026 |
Each country’s stock prices use the OECD share price index, compared with its own 10-year average. The US here uses the OECD’s US share price index (from 1957), which differs from Professor Shiller’s S&P 500 series (from 1871) used for the “US stocks” global anchor, so the positions differ too. Market-cap shares are based on the World Bank’s latest annual figures for total stock market capitalization.
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every warm month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with World stocks warm, excluding the current period (129)All months (599)
Median of the deepest drop below the starting month within the next 5 years: −3.8% for months with World stocks warm; −4.0% for all months.
The warm months come from a small number of market episodes (8), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast. “US stocks” means the S&P 500 price index compiled by Professor Shiller (monthly average, excluding dividends).
| Median position | Back to neutral (40–60) | Still warm or more extreme | |
|---|---|---|---|
| 1 yr later | 65warm | 22% | 63% |
| 3 yr later | 61warm | 22% | 52% |
| 5 yr later | 72warm | 16% | 61% |
Has hot or cold lined up with later returns?
1976–2021: average yearly change in US stocks over the next 5 years
There is no clear relationship between hot or cold and what came next. The gaps between the bars are not consistent across months (rank correlation below 0.25); this is a record of the past, not a forecast.
What it is linked to
US stockstoWorld stocksCommon explanation: Ripple · same direction
The US is the world’s largest stock market, and US corrections often spill over to other markets; in a crisis, markets everywhere fall together
This issue: US stocks at 94 (hot), World stocks at 72 (warm) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.77 · in step in 45 of 45 5-year periods
Financial stresstoWorld stocksCommon explanation: Ripple · opposite direction
In a panic, the prices of risky assets of all kinds tend to fall together
This issue: Financial stress at 12 (cold), World stocks at 72 (warm) — Financial stress below normal, World stocks above normal, in line with the common explanation (this is an inverse link).
Supported by the dataAgreement +0.48 · in step in 28 of 32 5-year periods
OFR stresstoWorld stocksCommon explanation: Ripple · opposite direction
When financial stress and volatility jump, funds that control risk by volatility lower their stock holdings at the same time, putting pressure on stock markets
This issue: OFR stress at 36 (cool), World stocks at 72 (warm) — OFR stress below normal, World stocks above normal, in line with the common explanation (this is an inverse link).
Supported by the dataAgreement +0.50 · in step in 12 of 12 5-year periods
USD/JPYtoWorld stocksCommon explanation: Ripple · a sharp rise in the yen weighs on world stocks
Positions funded in yen are forced to unwind together, and stock markets around the world come under pressure at the same time
This issue: USD/JPY at 94 (hot), World stocks at 72 (warm) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.13 · in step in 18 of 31 5-year periods
Leading indextoWorld stocksCommon explanation: Knock-on · same direction
Strong global economy → company profits everywhere → world share prices
This issue: Leading index at 42 (neutral), World stocks at 72 (warm) — at least one is in the neutral range (40–60), so we make no call this issue.
Not visible in our dataAgreement +0.08 · in step in 33 of 45 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
Bond volatilitytoWorld stocksCommon explanation: Ripple · opposite direction
When rates swing widely, discount rates for all assets become unstable, and risky assets come under pressure together
This issue: Bond volatility at 38 (cool), World stocks at 72 (warm) — Bond volatility below normal, World stocks above normal, in line with the common explanation (this is an inverse link).
Not visible in our dataAgreement −0.15 · in step in 35 of 45 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
Data and sources