It was a tough week overall for global stock markets.
The story was similar for most of your positions: they hit yearly highs on April 14 or 15, and then dropped sharply after the announcement of the Securities and Exchange Commission’s (SEC’s) probe into Goldman Sachs. On Monday, emerging-market stocks fell the most that they have in more than two months, since Feb. 5. The good news is that global stocks rebounded sharply yesterday on Citigroup’s best results since 2007 and after Goldman Sachs’ first-quarter corporate profit numbers overshadowed the negative news about the SEC’s investigation. Asian stock markets also are sharply higher this morning, as robust U.S. earnings offer further evidence of recovery.
Based on the market’s reaction, it does not appear that the Goldman scandal itself will be enough to derail the current market rally. That said, markets are still technically overbought, and soon we’ll be entering a traditionally quiet period in the summer. None of this news really affects your current Global Stock Investor positions on a fundamental level, and all of your current positions remain BUYs.
In stock-specific news, Freeport-McMoRan Copper & Gold Inc. (FCX) reported much-improved first-quarter earnings today before the market opened. Its first quarter 2010 net income soared to $897 million, or $2 a share, compared with $43 million, or 11 cents a share, for the same quarter last year. Although the stock often sells off after earnings announcements, it was actually trading up in after-hours trading, before dipping once the market opened. But keep an eye out for sharp moves in this stock.
Market Vectors Brazil Small-Cap ETF (BRF) ended the week slightly lower as Brazil continues to drag, compared with BRIC rivals India and Russia. Nevertheless, BRF remains a BUY.
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) fell slightly as fervor around yuan revaluation cooled slightly. With revaluation in the cards, CYB remains a BUY.
iShares MSCI Israel Cap Invest Mkt Index (EIS) dropped in its first week in the portfolio. A recent report projected that the Israeli IT market will have a value of $4.9 billion in 2010 and is forecast to reach $6.1 billion in 2014. EIS remains a BUY.
UltraShort Euro ProShares (EUO) resumed its upward trend, rising 2.46% as the Greek crisis refuses to go away. Your bet against the euro remains a BUY.
iShares MSCI South Korea Index Fund (EWY) fell back this week. But shares in South Korea rose yesterday, shrugging off a report that North Korea was readying for a third nuclear test. EWY remains a BUY.
Freeport-McMoRan Copper & Gold Inc. (FCX) paid out a dividend of 15 cents on April 15, as the stock itself pulled back to the $80.80 level. The world’s largest publicly traded copper company’s report this morning of strong first quarter 2010 earnings confirms that FCX is on the ascent. With global demand for copper and other base metals recovering, FCX remains a BUY.
Market Vectors Indonesia ETF (IDX) hit yet another record high of $74.35 on April 15, before pulling back. Indonesian debt — as well as the debt of many of its Asian neighbors — now is considered to be more creditworthy and stable than that of European countries like Greece and Spain. The “next BRIC” remains a BUY.
ArcelorMittal (MT) fell back this week on general market weakness. ArcelorMittal announced plans to build greenfield steel production capacity of 30 million tons per annum in India. The world’s biggest steel company remains a BUY.
Market Vectors Russia ETF (RSX) hit a high of $36.81 last week, before falling back this week in sympathy with all other global stock markets. This volatile bet remains a BUY.
iShares MSCI Turkey Invest Mkt Index (TUR) hit a yearly high of $63.23 last week before dropping back. One of the top performers of 2010, Turkey remains a BUY.
VALE S.A. (VALE) hit a yearly high of $34.31 on April 14, and paid out a dividend of 24 cents per share a day later. This Brazilian giant remains a BUY.
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