YTD Global Trend Status: Emerging Markets and Resource Exporters

Emerging markets (EEM) are outperforming developed markets YTD — up 2.5% versus EFA, which is down 15%, and SPY, which is down 9%.

Resource export related markets Brazil, Russia, Australia, Canada and Chile, as a group, are doing better than the goods and services export related market group. Chile, a copper exporter, is up 19%. Russia, an oil exporter, is up 15%. Brazil, an agricultural and oil/ethanol exporter, is up 12%. Australia and Canada, as energy and materials exporters in more diversified economies, are down 3% and 2% respectively.

Crude oil is up 17% YTD, and copper is up 30%.

Goods and services exporters, Germany, Japan and India are down YTD (India is almost even). China and South Korea are positive YTD, roughly 2% and 6% respectively. Germany is down 20% and Japan in down 14%.

click images to enlarge

MSCI Emerging Markets: EEM

RESOURCE EXPORTERS

Brazil: EWZ

Russia: RSX

Australia: EWA

Canada: EWC

Chile: ECH

TWO KEY EXPORT RESOURCES

OIL

COPPER

GOODS/SERVICES EXPORTERS

Germany: EWG

Japan: EWJ

China: FXI

India: INP

South Korea: EWY

Comments

[aarc:]

Charts of EWA, EWJ, FXI, EWI and other ETFs of emerging markets are misleading charts: Those charts are beholden to the US stock markets since companies represented by those ETFs are being traded in the US and not representative of the whole stock markets in those countries.

Use Shanghai and Szensen indeces for China. HangSeng for Hongkong; Kospi for Korea; Nikkei225 for Japan; ASX200 for Australia; Sensex for India; DAX for Germany; etc.

The ETFs are still in disconnect to their underlying foreign indeces as most investors and traders are not aware or not following the market actions in those countries but rather are being emotionally affected by the relentless sell-off of the Dow Jones and SnP since Oct2008.

China, Hongkong, Taiwan, India, Korea, and Japan did not produce lower lows from Oct, 2008 to present.

China in particular is now in the process of finalizing an impulsive 1-2-3-4-5 rally on the weekly chart while FXI is still trying to form an A-B-C corrective process (in Elliott Waves parlance). A 1-2-3-4-5 is bullish while an ABC pattern is bearish. Big difference in performance and potential future price actions.

You have to use statistical data based on the actual indeces and not their ETFs that are presently dysfunctional to say the least. Once US traders and investors realize their mistakes, they should correct such mistakes accordingly if not the ETF managers.

Mar 30 03:17 PM

[Drew Arnold:]

It's important to remember that while FXI has only gained 2% this year, China is driving a lot of the growth that we're seeing from the resource exporters. It's not as if resource exporters are the only ones experiencing gains from these transactions. Look for FXI to make some heavy relative gains this year... China is clearly spending.

Mar 30 04:42 PM

[367851:]

EWA, EWC, EWZ, those are good investments.

Mar 30 07:15 PM