- This just in: The iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) is down about 10% for the month of June (it's off 1.9% in today's session). Since peaking in late January, it's down by roughly 20%.
- Emerging markets are often among the first to buckle in a Fed rate hike cycle, and the trade spat with China isn't helping either.
- Sentiment, however, may be overdone, writes Andrew Cinko at Bloomberg. He notes the MSCI EM Index is now down in 9 of the last 11 sessions, and at its most oversold level in 2.5 years (based on 14-day RSI). SunTrust's Keith Lerner says the gap in three-month rolling returns between EM and the S&P 500 has soared to nearly 17% - a level often associated with a coming turn in the market.
- With low expectations, "a little good news can go a long way," says Lerner.
- ETFs: EEM, VWO, IEMG, EDC, SCHE, EDZ, EMF, MSF, ADRE, EEV, EUM, EET, SPEM, EEME, XSOE, DBEM, FEM, HEEM, EWEM, ROAM, ESGE, EDBI, EMLB, FLQE, KEMP, EMSA, KLEM, RFEM, EMEM, MFEM, PPEM
- Now read: Sector Study: Long U.S. Vs. Short Emerging Markets
Original article