Investing
Haven
No Result
View All Result
Wednesday, January 27, 2021
  • Login
  • Premium Services & Login
  • 2021 Forecasts
  • Commodities & Gold
  • Stocks
  • Crypto
  • Mission 2026
Crypto investing >>
Investing
Haven
  • Premium Services & Login
  • 2021 Forecasts
  • Commodities & Gold
  • Stocks
  • Crypto
  • Mission 2026
No Result
View All Result
Investing Haven
No Result
View All Result
Home Markets & Stocks

Buy Emerging Stock Markets Or U.S. Stocks For 2019?

by Taki Tsaklanos
December 13, 2018
in Markets & Stocks
0
Tags: EEM
emerging markets
2k
VIEWS
Share on FacebookShare on Twitter

According to our emerging stock markets forecast 2019 we identified the current price levels as the make-or-break level. In other words any sustained push higher or lower would result in a confirmed breakout (very bullish) or confirmed breakdown (neutral to bearish). In this article we present a different perspective as we are waiting for the market to confirm whether it recommends to buy emerging stock markets for 2019.

Let’s start with a quick update on how emerging stock markets (EEM) are doing at present time.

Smart investors buy emerging stock markets for 2019

As per Forbes, a good read published yesterday, it seems that emerging stock markets are getting a bid. Smart investors believe emerging stock markets are a buy for 2019, visibly.

It’s already happening. Don’t let the recent sell-off scare you: The smart money is moving out of the U.S. and going abroad. The risk-off cash position is due to the Fed. The rest is a symptom of a red-hot U.S. stock market that got too expensive for its own good, and right at a time when interest rates are rising and tight labor markets have peaked. If the Fed goes dovish next year, investors expect a lot of that cash to go into emerging markets.

It continues: “Net inflows since November 1 for all emerging market equity funds are $8.34 billion as of December 5, according to EPFR Global, a Cambridge, Massachusetts-based fund-tracking firm. Even China, which suffers from negative sentiment, saw net equity inflows of $3.49 billion over that period while flows into U.S. equity funds saw outflows of $2.9 billion.”

No surprise they pointed out that China’s stock market for 2019 is cheap because of the ‘trade war’ fears, as well as South Korea, Russia, Turkey and Argentina.

Buy emerging stock markets or U.S. stocks for 2019

We were triggered by this quote in the Forbes article to look into the relative strength of emerging stock markets vs U.S. stocks.

Big investors have been unwinding the so-called “QE trade” since 2017. The S&P and the German DAX have been the most resilient. As the year ends, everyone is seeing that trend change even as U.S. companies still look in good shape. “I think the forces of gravity move back to emerging markets in 2019.”

This is an interesting viewpoint.

So we extend this with an exercise of comparing emerging stock markets to U.S. stock markets with the ultimate goal to have an understanding if the intermarket dynamics suggest to buy emerging stock markets for 2019.

Below is the long term chart of emerging stock markets to U.S. stock markets, in particular the EEM ETF to the SPX index.

It is clear that we can identify a couple of periods over the last 20 years.

First, emerging stock markets against the US stocks have outperformed in the period 2002-2008. It was a better idea to hold top performing emerging markets in that time period even if US stock were going up.

Next, from 2011-2015 they have underperformed the US. It was a better idea to hold US stocks.

Right now, however, emerging markets compared to US stocks are in “no man’s land” which means there is no clear winner. Mathematically, there are 2 scenarios that might be playing out: scenario 1 is a new downtrend, scenario 2 is a neutral trend.

We cannot know for sure until we have more data confirming a new trend which is not to say they are bullish nor bearish, there is simply no trend.

So it is interesting that the relative viewpoint of emerging markets to US stocks is confirming the conclusions we started off with in the introduction of this article. Emerging markets are at a make-or-break level, it is sufficient to watch EEM ETF at 40 points, especially monthly closes.

emerging stock markets vs US stocks 2019

  premium service trade alerts   premium service trade alerts   premium service crypto teaser  
Taki Tsaklanos

Taki Tsaklanos

Taki has +15 years of experience in global markets. His methodology is unique and effective, yet easy to understand; it is based on chart analysis combined with intermarket / fundamental / sentiment analysis. His work appeared on major financial outlets like FinancialSense, MarketWatch, ... Email: taki.tsaklanos@gmail.com. Twitter: twitter.com/investinghaven

  • Trending
  • Comments
  • Latest
silver prices

A Silver Price Forecast For 2021 *Silver 30 USD Underway*

January 2, 2021
gold price

A Gold Price Forecast For 2021 *Gold 2200 USD Underway*

January 2, 2021
dow jones

Dow Jones Long Term Chart on 20 Years *10 Must See Charts*

October 26, 2020
dow jones

A Dow Jones Forecast For 2021 *New All Time Highs*

January 2, 2021
lithium mining stocks

Lithium Stocks on Fire In 2021

0

Protected: [Emerging Markets/Gold/Silver] Heads up Template

0

Protected: [SPY] Heads up Template

0

Protected: [GOLD] Buy Alert Template

0
lithium mining stocks

Lithium Stocks on Fire In 2021

January 24, 2021
bitcoin trade

Is This Topping Pattern In Bitcoin Really Concerning?

January 24, 2021
bulls bears

Stocks Ragingly Bullish But Do These Charts Suggest A Better Entry Level Is Underway?

January 24, 2021
attention

‘Watchout Chart’ For February 2021: US Dollar

January 24, 2021

Connect with InvestingHaven

Receive top notch forecasts for free.

*We hate spam as you do.

Categories

  • Premium Services & Login
  • 2021 Forecasts
  • Commodities & Gold
  • Stocks
  • Crypto
  • Mission 2026

Site Navigation

  • RSS Feed
  • About us
  • Sitemap
  • Privacy & Disclaimer
  • Terms of Service
  • Contact Us
Investing
Haven

Top notch forecasting with gold price forecast, many stock predictions, cryptocurrency charts. Many investing tips and crypto market analysis.

Copyright © 2021 Investing Haven

No Result
View All Result
  • Premium Services & Login
  • Premium Investing Service
  • Premium Trading Service
  • Premium Crypto Service
  • 2021 Forecasts
  • Markets & Stocks
  • Commodities & Gold
  • Crypto Markets
  • Mission 2026

Copyright © 2021 Investing Haven

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In