Categories: Stock Market NewsThe Alpha Investor Letter Hotlines

Global Stock Investor Hotline 45

Global stock markets pulled back sharply for most of the past week and then rallied strongly yesterday.

Your best-performing position for the week was your bet against the euro through the UltraShort Euro ProShares (EUO) ETF, which ended the week 4.3% higher — at a record high of $20.85. With Fitch’s downgrade of Portugal today, you can expect the euro to weaken further — and this position to gain — in today’s trading as well. Two other positions in your Global Stock Investor portfolio hit highs for the year — Brazil’s VALE S.A. (VALE) and Market Vectors Indonesia ETF (IDX).

This good news notwithstanding, global markets are still feeling skittish. The schizophrenia is evident in the way in which the media portrays the exact same bit of news.

Consider this morning’s headlines on the latest news on Japanese exports.

On the one hand, the Associated Press chose to highlight an eye-poppingly favorable statistic.

Japan Exports up 45% in February

Great news, right?

But then the London Financial Times’ headline highlighted the same exact set of statistics in a much more worrying fashion:

Japan’s Exports Decline for the First Time in a Year

Same story, same facts. Different conclusion.

That just about sums up the struggle between the glass-half-empty, glass-half-full crowd in global markets…

Portfolio Update

Market Vectors Brazil Small-Cap ETF (BRF) ended the week slightly lower. Brazil’s central bank kept rates steady at a record low of 8.75%, even as inflation has surged above the bank’s target of 4.5%. With the Brazilian economy booming, BRF remains a BUY.

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The WisdomTree Dreyfus Chinese Yuan Fund (CYB) fell slightly this past week, even as the debate surrounding yuan revaluation continues. CYB remains a HOLD.

UltraShort Euro ProShares (EUO) jumped 4.3% this week, as the euro dropped to a 10-month low against the dollar. It also declined to a record against the Swiss franc as news of an IMF role was seen as undermining the credibility of the single currency. As the new whipping boy among international currencies, your bet against the euro remains a BUY.

iShares MSCI South Korea Index Fund (EWY) rose 1.7% this past week. Major EWY component Samsung is targeting a higher operating profit and double-digit percentage growth in sales in 2010, fueled by strong demand for its flat screens and memory chips. EWY is a BUY.

Freeport-McMoRan Copper & Gold Inc. (FCX) fell slightly this week. For all the concern surrounding the sustainability of the demand for copper, the trend in FCX is still up. FCX remains a BUY.

Market Vectors Indonesia ETF (IDX) hit a record high of $70.79 last week, before ending the week 1.55% higher. With Indonesia one of the few global markets trading at or near record highs, IDX remains a BUY.

Arcelor Mittal (MT) ended the week broadly flat. The world’s biggest steelmaker is seeking to expand iron ore production capacity by 67% by 2015, raising its self-sufficiency in raw materials as prices soar. MT remains a BUY.

Market Vectors Russia ETF (RSX) fell back slightly this week. As a proxy for increasing global risk appetite, RSX is a BUY.

iShares MSCI Turkey Invest Mkt Index (TUR) rose slightly this week. As a country immune from the fiscal and currency difficulties of other Mediterranean economies, TUR remains a BUY.

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VALE S.A. (VALE) rose 2.26% this past week, hitting a new high for the year. The stock surged on reports that Vale sent a note to clients globally hiking rates for iron ore 114%, to $122.2 per metric ton from $57 a ton last year. VALE is a BUY.

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Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.