Global markets consolidated their gains this past week and pulled back slightly as a group. There may be more pressure on markets in the days ahead, particularly in Asia, as the Fed’s assessment of the U.S. economy noted that the pace of the economic recovery in the United States likely will be more gradual than it previously thought. China’s mandarins also are trying to slow its economy, as they try to deflate its property bubble without a large pop.
Your positions in Global Stock Investor have held up well, however, with several of your positions, including Market Vectors Brazil Small-Cap ETF (BRF) and iShares MSCI Malaysia Index (EWM), hitting record highs. The strongest markets in the world, like Chile and Colombia — composing a big chunk of your investment in Claymore/BNY Mellon Frontier Markets (FRN) — also continue to trade near record highs. Meanwhile, the Japanese yen continues to soar to record highs — good news for your position in CurrencyShares Japanese Yen Trust (FXY).
Note that I have tightened your stops on several of these positions.
Portfolio Update
Market Vectors Brazil Small-Cap ETF (BRF) fell slightly on the week, after hitting a record high of $50.56 last Friday. A leveraged play on Brazil’s growth, BRF remains a BUY.
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) remained as flat as ever, with Chinese exports showing signs of slowing their relentless growth. CYB is a BUY.
iShares MSCI Malaysia Index (EWM) ended the week flat, after hitting a record high of $12.40 earlier in the week. Year-to-date, the Malaysian currency is the best-performing currency in Asia, appreciating about 9% against the dollar. This is a terrific tailwind for your position. EWM is a BUY.
iShares MSCI Taiwan Index (EWT) also ended the week flat. Taiwan’s economy expanded 13.3% from a year earlier in the first quarter, the fastest pace in more than three decades, as overseas sales jumped 42%. This tech-heavy index is a BUY.
iShares MSCI South Korea Index (EWY) fell back slightly this week, as the International Monetary Fund increased its 2010 growth forecast for South Korea to 5.75% from 4.5% as a result of the recovery in global trade and a successful Korean government-led stimulus. EWY remains a BUY.
Freeport-McMoRan Copper & Gold, Inc. (FCX) hit the $75.00 mark before trading lower, as base metal prices fell on worries about a slowdown in China’s property market. FCX remains a BUY.
Claymore/BNY Mellon Frontier Markets (FRN) bucked the trend and rose yet another 3% this past week. With FRN’s component stock markets in Colombia and Chile among the world’s best performers, FRN remains a BUY. Raise your stop to $18.25.
CurrencyShares Japanese Yen Trust (FXY) closed at a record high of $116.01 as the Japanese yen continues to shine. With its defensive properties fully intact, FXY is a terrific hedge in your portfolio. FXY is a defensive HOLD. Raise your stop to $112.50.
Global X FTSE Nordic 30 ETF (GXF) was flat in its first week in the portfolio as Nordic markets consolidated their recent gains. GXF remains a BUY.
Market Vectors Indonesia ETF (IDX) bounced back 2% this week, after its recent sell-off from record highs. As the strongest-performing market in Asia this year, IDX remains a BUY.
Market Vectors Russia ETF (RSX) was slightly down this week, even as the country struggles with record heat and hundreds of forest fires. As a “risk play” in emerging markets, RSX remains a BUY.
iShares MSCI Turkey Invest Mkt Index (TUR) fell back slightly this week. With Turkey’s economy the sixth largest and its per capita gross domestic product (GDP) just over $8,700 — greater than any of the BRICs — TUR remains a BUY.
Vale S.A. (VALE) fell back under the $29.00 level this week. As a play on global recovery, the Brazilian mining giant 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 or on my new blog, NickVardy.com.
