The mood of global stock markets has become more uncertain over the past two weeks. This morning, stock markets in Asia sold off on news that South Korea’s economic growth slowed sharply in the third quarter.
But this does not reflect the reality of robust growth around the world, outside of the United States and Western Europe.
For example, despite its recent slowdown, South Korea’s economy remains on track to grow about 6% in 2010. That’s far stronger than the 0.2% expansion it eked out in 2009. In fact, South Korea’s economy now has expanded for seven straight quarters. If only the United States could boast those numbers.
Nor is this uncertainty reflected in the performance of many of your Global Stock Investor holdings.
This past week, many of your positions hit records or 52-week highs. These include the iShares MSCI Singapore Index (EWS), the CurrencyShares Japanese Yen Trust (FXY), the Claymore/BNY Mellon Frontier Markets (FRN), the Market Vectors Indonesia ETF (IDX), the iShares MSCI Taiwan Index (EWT) and the Global X FTSE Nordic 30 ETF (GXF).
The truth is that it doesn’t get much better than this in global markets. Most global markets now have broken out to new yearly highs. And I expect that your Global Stock Investor portfolio will perform strongly for the rest of the year, as the traditional Q4 rally continues.
Portfolio Update
Market Vectors Brazil Small-Cap ETF (BRF) rose 2.54% this week, as it bounced off of last week’s lows. Brazil’s finance minister praised progress by the Group of 20 economies on global currency issues and ruled out a new capital gains tax on foreign holdings of local bonds to curb a domestic currency rally. BRF remains a BUY.
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) fell sharply yesterday, as China tried to curb the appreciation of the yuan. But traders said that they expect the yuan to resume appreciating later this year. CYB is a BUY.
iShares MSCI Malaysia Index (EWM) bounced 1.97% this past week. This exchange-traded fund (ETF) has attracted inflows of nearly $270 million this year. EWM remains a BUY.
iShares MSCI Singapore Index (EWS) hit another high for the year of $13.88, before ending the week up 1.38%. The Monetary Authority of Singapore (MAS) said that the republic’s economy is on track to grow 13% to 15% this year. EWS is a BUY.
iShares MSCI Taiwan Index (EWT) hit a yearly high of $13.84 this past week, ending the week 5.9% higher. Taiwan’s statistics bureau said that Taiwan’s economy will expand 8.2% this year and 4.6% in 2011. EWT is a BUY.
iShares MSCI South Korea Index (EWY) jumped 5% this week, hitting near-record highs. A pullback in this ETF today, after the announcement that growth in South Korea is slowing, offers a great opportunity to add to your position. EWY remains a BUY.
Freeport-McMoRan Copper & Gold, Inc. (FCX) jumped 6% last week, and now is back up near yearly highs. Argus upgraded FCX to a “Buy” yesterday. We agree. FCX is a BUY.
Claymore/BNY Mellon Frontier Markets (FRN) hit a record high of $23.80, ending the week up 1.88%. This bet on the world’s frontier markets remains a BUY.
CurrencyShares Japanese Yen Trust (FXY) hit a record high of $122.47 before pulling back and ending the week flat. This currency bet remains a defensive HOLD.
Global X FTSE Nordic 30 ETF (GXF) hit a record high of $19.80, before ending the week up 2.93%. Sweden’s central bank raised interest rates for the third time in four months, citing the rapidly strengthening Swedish economy and the need to keep inflation in check. With Nordic economies soaring, GXF remains a BUY.
Market Vectors Indonesia ETF (IDX) hit another record when it reached $89.57 last week, ending the week 4.56% higher. This market just keeps going and going. IDX remains a BUY.
JinkoSolar Holding Co., Ltd. (JKS) ended the week up 1.19%. The company filed plans to sell at least 3.5 million American depositary shares to fund expanded production capacity. This is putting pressure on the shares, but if you can take the volatility, JKS is a BUY.
Market Vectors Russia ETF (RSX) hit a yearly high of $34.85 last week, ending the week up 4.84%. With Q4 the strongest for Russia, RSX remains a BUY.
iShares MSCI Turkey Invest Mkt Index (TUR) rose 3.3% last week, and now is trading back up near record highs. With the Turkish lira trading at close to a two-year high against the dollar, and up some 13% against the U.S. currency since June, TUR is a BUY.
Vale S.A. (VALE) rose 3.46% this past week. The company may pass Russia’s OAO GMK Norilsk Nickel as the world’s largest producer of nickel next year. Vale remains a BUY.
P.S. If you’re in London, England, Nov. 12-13, please join me at the World MoneyShow at The Queen Elizabeth II Conference Centre. You’ll join 3,000 fellow investors to hear about what’s next for the U.K. and global economies. To register FREE, do so online by visiting The World MoneyShow website or by calling the international free phone number, 800/970-4355.
