China and Emerging Markets: The Quiet Rebound

Doug Fabian
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Posted: Mar 27, 2014 12:01 AM
China and Emerging Markets: The Quiet Rebound

The first quarter of 2014 is almost in the books, and so far things have been a lot tougher in the markets than the previous two years. For example, year to date through March 25, the S&P 500 is up about 1.8%. Last year, the index was up nearly 6% through the first three months. In 2012, we already were up about 11%.

Yes, it's been harder to make money this year, and that's particularly true if you've been allocated to China and/or emerging markets. The charts here of the iShares China Large-Cap ETF (FXI) and the iShares MSCI Emerging Markets (EEM) show the respective tumble that took place in January, which was followed by a lot of volatility through mid-March.

Recently, however, stocks in both China and the emerging markets have staged a quiet comeback. FXI just broke above its 50-day moving average, while EEM now is back above both its 50- and 200-day moving averages.

So, is the move in China and in the emerging markets the beginning of more upside in these two sectors?

I am going to let the data make the official judgment, but if you are looking for two value sectors that are starting to see a lot of capital flowing their way, then certainly these two areas deserve serious consideration.

If you want to know what I am buying right now, and how you can profit from trends in the current market, then I invite you to check out my Successful Investing newsletter today.