It was yet another flat week for your Global Stock Investor portfolio as most of your holdings are locked within well-trodden trading ranges. August was an exceptionally quiet month for both U.S. and global markets. Volume on the New York Stock Exchange dropped by a third from July. That meant this was the slowest August since 2002 — a month where the mood in the market was remarkably similar to the current one.
The one exception to the market’s doldrums was the continuing strength of the dollar against the euro. As the U.S. dollar continues its rally, your holding in the Market Vectors Double Short Euro ETN (DRR) hit record highs this week. It now is up a solid 5.89% during the last three weeks. As this bet is proving to be a solid winner in your portfolio, you may want to add to your position. It’s one of the few trends in global financial markets that you can ride for some immediate gains.
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) was flat this week, resisting the U.S. dollar’s continuing strength. The appreciation of the yuan is a boring but reliable play that you can expect to generate steady if unspectacular returns of 6% or 7% a year. But that’s a lot more than what you’re getting in your other Chinese investments.
ICICI Bank Ltd. (IBN) jumped this week on positive news about inflation from India. Millicom International Cellular (MICC) continues to be locked in a trading range, even as its business expands steadily in both Latin America and Africa.
Given the uncertainty surrounding the oil price, I am keeping Brazilian oil giant Petrobras (PBR) at a HOLD. All of our other recommendations remain BUYs.
PORTFOLIO UPDATE
WisdomTree Dreyfus Chinese Yuan Fund (CYB) declined yesterday to an eight-day low against the U.S. dollar. At the same time, the yuan climbed to a new multi-year high against the euro — the highest level for the yuan since October 2006. This is a steady “cash plus” style investment” which is your #1 play on China, even as the stock market continues to plummet. CYB is a BUY.
Market Vectors Double Short Euro ETN (DRR) hit a record high of $45.70 yesterday as Europe’s currency continues to weaken against the dollar. The weaker the euro, the better this pick does. With the euro’s downward trend set to continue, DRR is a strong BUY.
ICICI Bank Ltd. (IBN) jumped this week as investors sought bargains in interest rate-sensitive stocks as inflation in India came in below expectations. This is good news but is more “noise” than a strong trend. IBN is still well within its current trading range. The big move in the stock will come when market sentiment improves. “India’s Citibank” is a BUY.
Millicom International Cellular (MICC) announced that it launched 3G services in Guatemala, Honduras, and Bolivia last week. Paraguay, El Salvador and Colombia will follow before the end of this year. That will complete the roll out of 3G across all six of its markets in Latin America. With the stock still in a fairly tight trading range, Millicom is set to rally strongly on any sustained market turn and is a BUY.
NII Holdings (NIHD) traded broadly flat this past week. With several brokerages putting a price target of close to $80 on the stock, there remains substantial upside in this George Soros favorite. NIHD is BUY.
Petrobras (PBR) was in the news this week as Brazil’s President Luiz Inacio Lula da Silva symbolically dipped his hands in the first oil from vast new offshore reserves discovered by Petrobras last November. With the trend in oil still unclear, I am keeping this stock at a HOLD.
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