Emerging Markets 03 (Sep 16 - Dec 27)

[winston]

Emerging Markets Have Found Support And Are Headed Higher

by Casey Murphy

Emerging markets faced broad selling after the news of the U.S. election, but a strong rebound off of major support levels have renewed the interest of many investors.

Specifically, based on the charts above, the bullish MACD crossovers combined with the bounces of the 200-day moving averages, suggest that opening a position at current levels in the various emerging markets could be a wise decision heading into 2017.

Source: Investopedia

http://finance.yahoo.com/m/6125c6af-923 ... found.html

[winston]

How to Grab Explosive Emerging-Market Profits and Keep Your Money Here at Home

Source: MONEY MORNING

http://moneymorning.com/active-premiums ... e-at-home/

[winston]

These stocks could see the ultimate counter-Trump rally: Technician

by Amanda Diaz

The Trump trade is cooling off — and that's great news for one group of stocks.

The emerging markets ETF, the EEM, extended gains Monday after snapping a four week post-election losing streak on Friday.

According to one technician, the counter-Trump rally could continue — at least for now.

"From a trading basis, we think the EEM (NYSE Arca: EEM) rallies towards $40 over the coming months," Oppenheimer's Ari Wald said Monday on CNBC's " Power Lunch ."

That's a nearly 13 percent rally from where it is currently trading and puts the EEM at its highest level since June 2015.

The ETF has gotten beaten up since the election, falling more than 5 percent, weighed down by the strong dollar and jitters over what Donald Trump 's trade policies could mean for the space.

The move comes amid a record rally in U.S. equities, with the S&P (^GSPC) and Dow (Dow Jones Global Indexes: .DJI) both up more than 3 percent in the same period.

Still, the EEM is outperforming U.S. equities year to date — up 10 percent while the S&P 500 has risen 8 percent in the same period — leading the ETF to breach what Wald notes on the chart as a two-year down trend.

That breakout combined with what Wald anticipates as risk entering the market, leads him to believe the ETF will run back to 52-week highs.

But the key to investing is to know what you own, and Erin Gibbs, equity chief investment officer of S&P Global, points out that making a bet on the EEM is essentially wagering on China, which could prove dangerous given the volatility in its currency and stock market.

"The EEM has been weighed down by the underperformance of emerging country performance in Asia, which accounts for over 70 percent of the ETF," she explained Monday in a " Trading Nation " segment. "The ETF also has a heavy exposure in information technology and banks, accounting for about half of the portfolio."

The Chinese banking sector relies heavily on the yuan for stabilization, which has been steadily falling against the U.S. dollar.

Furthermore, some of the country's bigger tech stocks have dropped of late — Taiwan Semi (Taiwan Stock Exchange: 2330-TW), Alibaba (BABA) and Baidu (BIDU) are down 3, 8 and 7 percent, respectively, in the last month.

"This ETF if very much an Asia emerging market portfolio and will trade more close to the Chinese market and outlook," she added.

Source: Yahoo Finance

http://finance.yahoo.com/news/stocks-co ... 52708.html

[winston]

Credit Suisse 2017 Outlook: Keep Calm And Buy Emerging Markets

By Shuli Ren

Emerging markets now confront numerous headwinds, including rising U.S. bond yields (which makes investing in high-yield emerging markets less attractive) and Trump’s protectionist tone (which means emerging markets are likely to benefit less from an economic rebound in the US).

Six markets – Russia, China, Mexico, Taiwan, South Korea and Thailand – currently have neutral to positive earnings revisions.

“We recommend overweight positions on China, Korea, Brazil and Indonesia, funded by underweights on Taiwan, India, South Africa, Malaysia, Thailand, Chile and Poland.

We have a [b]benchmark stance on Russia, Mexico, Philippines and Turkey,[/b]” wrote Credit Suisse.

The bank is most bullish on Korea, with a 10% index overweight

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... g-markets/

[winston]

The best bargain for the next three years

Source: Daily Crux

http://thecrux.com/alexander-green-the- ... ree-years/

[winston]

Should You Buy Emerging Markets in 2017? (VWO)

VWO could be powered forward next year by a number of existing and developing tailwinds

By David Fabian

Vanguard FTSE Emerging Market ETF (NYSEARCA:VWO) is made up of a diversified portfolio of more than 4,200 stocks of emerging market countries. This multi-cap index is dominated by China (28%), Taiwan (15.5%), and India (11.8%).

Here are some of the things I like about VWO right now:

1.. Emerging-market stocks bottomed in January along with the U.S. stock market. Now, they have entered a new uptrend on a technical lookback.

2. VWO has managed to break above and (mostly) stay above its long-term 200-day simple moving average throughout most of 2016. There were some minor tests, but those ultimately led to higher highs and higher lows over the past 12 months.

3. While emerging markets have traveled a somewhat different path, this index is pacing the year-to-date gains of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) at +12% each.

4. Emerging-market nations are showing much greater relative momentum than Europe and many other flagging foreign indices.
The strength of the U.S. dollar has been a headwind for emerging markets. A flat or falling U.S. dollar would ultimately add to current momentum.

5. The rebound in commodity prices has been a big catalyst behind the surge in emerging market stocks in 2016. Renewed strength in energy and precious metals will likely add to this trend.

6. The relative valuation gap between U.S. stocks and emerging-market stocks over the past five years is a potential mean-reversion opportunity.

Source: FMD Capital Management

http://investorplace.com/2016/12/should ... Eua1_l96M8

[winston]

HSBC: Why the strong dollar won’t bench emerging markets for long

by Leslie Shaffer

The dollar has surged in the wake of Donald Trump's surprise election win in the U.S. and as the U.S. Federal Reserve surprised markets at its meeting last week by indicating it would likely hike rates three times next year, a faster rate of tightening than the widely expected two times.

That's spurred hefty outflows from emerging markets as a stronger dollar and higher U.S. rates have dimmed the allure of riskier assets in developing countries. In addition, emerging-market companies' ability to service dollar-denominated debt will be dented.

"We're going to focus on markets where there's a large domestic component available in the markets and not so much on the export cycle, because the export cycle is simply very weak across the region"

He also expected that dividend-yield and consumer-staple plays would do well, noting that while they had been in favour for the past couple years, they'd lost popularity over the past few months.

In addition, he pointed to plays on themes that weren't sensitive to global and macro developments, such as financial inclusion, automation, changes in retail formats and the Asian defense industry.

That suggested plays on large-capitalization banks in Indonesia and India, selected consumer names, with defense plays in China, South Korea and Singapore.

Source: CNBC.com

http://www.cnbc.com/2016/12/22/hsbc-why ... yptr=yahoo

[winston]

Mark Mobius: This is how to play emerging markets in 2017

by Leslie Shaffer

"We remain cautious of China's banks as non-performing loan recognition dampens our outlook for the country's financial firms," they said.

"Like banks, China's real estate sector has staged a striking turnaround from a lengthy downturn, but we have remained on the sidelines, in part due to risks of overleverage and regulation."

Source: CNBC.com

http://www.cnbc.com/2016/12/21/mark-mob ... 50c72915e4

[winston]

While bullish energy sector positions are at 5-year high, investors are back to underweight on emerging markets, the first time in 9 months, showing that “EM & UK are last cyclical catch-up trades”, noted Merrill.

[winston]

3 Reasons For Emerging Market Investor Caution

By Dimitra DeFotis

There are three critical considerations for EM equity performance this year, and they don’t hinge on valuation:
1. the dollar,
2. commodity prices and
3. China.

Source: Barron's

http://blogs.barrons.com/asiastocks/201 ... r-caution/