Seven Up, Seven Down

Along with US equities, European stocks have also succumbed to gravity this week, extending a losing streak that started in the middle of last week. Through Thursday’s close, the STOXX 600 was down seven days in a row. While there was another seven-day losing streak that ended in September 2023, the last time there was a longer streak was nearly ten years ago in November 2016.

Since 1987, there have been 23 prior losing streaks of seven or more days, and the STOXX 600’s average decline during those seven-day streaks (or the first seven days of the streaks that lasted longer) was 5.98%. With the index down 1.34% during the current slide, it hardly seems like a big deal. More notable is that the September 2023 streak was the only other one to see a decline of less than 2%.

Interestingly enough, the current seven-day streak immediately followed what was a seven-day winning streak for the STOXX 600, and in the index’s history dating back to 1987, there was never another time when the index had a seven-day winning streak immediately followed by a seven-day losing streak!

Like the shallow decline of the current losing streak, the size of the rally in the seven-day winning streak that preceded this decline was also relatively modest. Of the 52 prior seven-day winning streaks in the STOXX 600’s history, the average gain during the seven up days (or the first seven days of the streaks that lasted longer) was 3.90%. During the most recent winning streak, though, the STOXX 600 rallied just 1.74%, which ranked as the fifth mildest of the 52. Putting the two streaks together, over the last 14 trading days, the STOXX 600 is up less than 0.2%.