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China and Brazil ETFs: Back in Business?
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In recent commentary, I suggested that the price movement of BRIC ETFs determine the price movement of developed market ETFs... not the other way around. Whereas the media have harped on Greece, I have steadfastly maintained that China's rate hikes, reserve increases and lending restrictions were the true catalyst(s) for stock asset correction.
That said, the last 5 days might have signaled a turning point. Indeed, China ETFs and Brazil ETFs are the hottest investments over the last trading week. Market watchers insist that global stock assets rose in response to the EU's bailout of Greek debt. Yet, on closer inspection, China's inflation eased in January to a mere 1.5%, which reduces pressure on Beijing to hike interest rates.
Something "hoppy" might be brewing in the ale pot. It may only be 5 days, yet China Dragon Halter (NYSE: PGJ) and MSCI Brazil (EWZ) are leading the bull charge.
Consider the possibilities here. Just a few short days ago, Brazil (NYSE: EWZ) and China (NYSE: PGJ) had fallen below long-term trendlines. Over the last 5 days, buyers have stepped up to the BRIC buying plate, pushing both of these ETFs back above 200-Day Moving Averages.
Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company and/or its clients may hold positions in the ETFs, mutual funds and/or index funds mentioned above. The company does not receive compensation from any of the fund providers covered in this feature. Moreover, the commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.
