Global markets resumed their upward trend this past week, with most of your positions gaining strongly. The pattern is a familiar one, and is (so far) unfolding as I expected. Every dip in the markets seems to be followed by another even stronger recovery, as investors scramble to re-enter the market.
The iShares MSCI Taiwan Index Fund (EWT), Vectors Russia ETF (RSX), SPDR S&P Emerging Markets Small Cap (EWX) and India’s ICICI Bank Ltd. (IBN) all hit highs for the year, with the latter soaring 11.23% this week alone. The Indian market has emerged as the global market with the most momentum.
Market Vectors Gold Miners ETF (GDX) also resumed its uptrend, as gold hit a record high of $1,043.45 per ounce. Gold and copper play Freeport-McMoRan Copper & Gold Inc. (FCX) has also benefited from gold’s recent surge.
Two of your positions, iShares MSCI South Korea Index Fund (EWY) and the SPDR Dow Jones Intl Real Estate (RWX), are still technically oversold, offering a good point of entry.
With negative sentiment still dominating the headlines, I am optimistic that global markets will continue to climb “a wall of worry” throughout the rest of Q4. Your high risk, high return positions like Vectors Russia ETF (RSX) and ICICI Bank Ltd. (IBN) are likely to be top performers. So enjoy the ride while it lasts. But as always, make sure you stick to your stops.
Portfolio Update
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) was flat again this week. According to the United Kingdom’s Telegraph newspaper: “You can date the end of dollar hegemony from China’s decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners.” The yuan remains a defensive BUY.
iShares MSCI Taiwan Index Fund (EWT) hit a record high of $12.43 for the year. Foreign buying in financial and construction shares on expectations of closer trade ties with China is fueling gains in Taiwan stocks. EWT remains a BUY.
SPDR S&P Emerging Markets Small Cap (EWX) also hit a record yesterday as emerging market stocks roar ahead. This leveraged bet on emerging markets is a BUY.
iShares MSCI South Korea Index Fund (EWY) pulled back slightly this week. South Korea’s latest house price data boosted chances of an interest rate rise as soon as next month, in line with Australia’s surprise tightening on Tuesday. The short-term pullback in the market is an excellent time to add to your position. EWY remains a BUY.
Freeport-McMoRan Copper & Gold Inc. (FCX) has pulled back off of its recent lows and is now flirting with the $70 level once again. With gold hitting record highs, FCX remains a BUY.
ICICI Bank Ltd. (IBN) jumped 11.23% this week, breaking through the $40 mark yesterday for the first time this year. With the BSE sensex, India’s main stock market index, bursting through the 17,000 level overnight, IBN remains a BUY.
Market Vectors Indonesia ETF (IDX) soared 6.3% this past week, closing at a record high of $62.99 as the Bank Indonesia kept its key interest rate unchanged at a record low for the second straight month. The “new BRIC” remains a BUY.
Market Vectors Gold Miners ETF (GDX) jumped 7% this past week as gold prices surged to a record high at $1,043.45 an ounce on Tuesday. With gold miners offering a leveraged play on the price of gold, GDX remains a BUY.
Market Vectors Russia ETF (RSX) broke through the $28 level for the first time this year. This leveraged bet on emerging markets is a BUY.
SPDR Dow Jones Intl Real Estate (RWX) resumed its uptrend this past week. With this ETF still technically oversold, this is a good time to add to your position. RWX is a BUY.
Chemical & Mining Co. of Chile Inc. (SQM) fell back slightly this week, but is already on the way back to recovery. SQM is a BUY.
P.S. If you want to keep up with my latest insights on developments in fast-paced global markets, you can now follow me on Twitter on @NickVardy.
