Your commodity-related positions in Freeport-McMoRan Copper & Gold Inc. (FCX) and Market Vectors Gold Miners ETF (GDX) traded near highs for the year this past week, as the price of gold continues to hit record highs.
Global stocks, on the other hand, pulled back from year highs reached early last week. After five consecutive days of pulling off of their highs, global markets are now once again technically oversold. That means that it’s not a bad time to take speculative, short-term trading positions.
This is all part of the normal ebb and flow of the markets. I expect another leg up in global markets between now and the end of the year. At that point, I expect to recommend that you tighten some of your stops on your Global Stock Investor positions. Otherwise, your current portfolio is well-positioned to take advantage of the final third of the Q4 rally.
This week, I am writing to you from a cruise ship in the middle of the Mediterranean, after having had the chance to visit Greece, Turkey, Israel and Egypt this week as part of Mark Skousen’s FreedomFest Mediterranean cruise.
Having regularly visited these four countries as part of my beat as a global emerging markets fund manager, I can confirm that three out of the four have made substantial visible progress during the past 10 years. Thanks to the Olympics, Athens, Greece, today boasts an airport and metro not unlike San Francisco’s BART. The Turkish economy is 50% bigger than the last time I saw it in 2001, its southern coast dotted both with multi-million dollar condominiums and the people who can afford them. Israel’s infrastructure and world-class tech sector are all the more remarkable given the millstone of its Palestinian problem. Egypt is the only country whose economic progress over the past 10 years is not immediately apparent.
On the whole, I think it will be awhile before you have the chance (or appetite) to invest in Arab and Muslim stock markets. Your position in the iShares MSCI Turkey Index Fund (TUR) remains the glaring exception.
Portfolio Update
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) was flat this week. The Chinese currency regulator introduced new rules to promote a standardized foreign exchange environment in the wake of speculation about currency appreciation and rising asset prices. The pressure on the Yuan is up. CYB remains a defensive BUY.
Claymore/BNY Mellon BRIC ETF (EEB) pulled back slightly this week as emerging markets corrected. Templeton’s Mark Mobius said that stocks in Brazil, Russia, India and China are likely to rise by 30%-40% in the near future, as higher economic growth and lower government debt spurs corporate earnings. This diversified bet on the BRIC economies remains a BUY.
iShares MSCI Taiwan Index Fund (EWT) pulled back these past few days, as Asian markets corrected. Two major Chinese carmakers announced that they are seeking to research and develop cars in Taiwan, expanding economic ties between the two political rivals to a new level. EWT remains a BUY.
SPDR S&P Emerging Markets Small Cap (EWX) pulled back from last week’s record highs. This leveraged bet on emerging markets remains a BUY.
iShares MSCI South Korea Index Fund (EWY) ended the week slightly higher. President Barack Obama met with South Korea’s president to push for open access to South Korean markets with the completion of a long-stalled trade agreement between Korea and the United States. EWY remains a BUY.
Freeport-McMoRan Copper & Gold Inc. (FCX) ended the week at a year high of $85.59 as gold continues to soar. This position remains a BUY.
Market Vectors Gold Miners ETF (GDX) closed near highs for the year, as gold climbed to a record in London and New York today. This latest increase was spurred by a report that India may buy still more bullion for its central-bank reserves. A leveraged bet on the price of gold, GDX remains a BUY.
Market Vectors Indonesia ETF (IDX) climbed above the $62 level for the first time this month before pulling back. Indonesia continues its reforms, and recently has amended a law covering the anti-corruption agency to make it more difficult to dismiss graft-fighters. IDX remains a BUY.
Market Vectors Russia ETF (RSX) pulled back slightly this week. A technical strategist at brokerage firm Auerbach Grayson & Co. expects the market to gain more than 5% to a 14-month high by the end of 2009, as crude rises to $82 a barrel. RSX remains a BUY.
SPDR Dow Jones Intl Real Estate (RWX) ended the week slightly down, in line with other global emerging markets. This play on the global real estate recovery is a BUY.
Chemical & Mining Co. of Chile Inc. (SQM) hit a year high of $40.14 last Wednesday before pulling back slightly. Chile’s currency, the peso, has been one of the highest-gaining emerging market currencies, surging more than 30% against the dollar so far this year. This relatively low volatility play remains a BUY.
iShares MSCI Turkey Index Fund (TUR) pulled back as risk aversion jumped in global markets. Turkish President Abdullah Gul announced that Turkey is now interested in once again becoming a "central player" in talks between both Israel and the Syrians and Israel and the Palestinians. Good luck to him. With this ETF now technically oversold, TUR remains a speculative 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.
