By Tim Seymour
With a major lag in emerging markets over last three years (we have documented this at length at (EmergingMoney) the best way to play what the Fed told us yesterday is the own Korea.
An improved U.S. economy and growing global PMIs mean the industrialized world is heating up…at least somewhat. What it doesn’t mean is that China is about to soar or stimulate or even get back to 2012 levels of GDP.
What it means is you don’t want to assume lagging commodities are going to rebound quickly. You want to own the countries that have lagged but who make their hay on the recovery in global trade and industrial cyclical.
South Korea (EWY) is the Japan of yesteryear and is a macro story that gets better by the day. The South Korean Won has been sagging against the U.S. dollar but has been strong against regional economies like Japan.
South Korea has a $63 billion in current account surplus and offers major linkage to improving U.S. fortunes. Timing wise it is a good time to jump in after -3% to start to the month and pressures that were taper related on capital flows.