10 Foreign ETFs Hit 3-Month Highs, Confirm Uptrend

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A handful of foreign developed and emerging market ETFs jumped to three-month highs Thursday and either broke above or extended recent moves above their long-term, 200-day moving averages to confirm new uptrends.Here is an overview of foreign markets that broke out today:

1.iShares MSCI South Korea Index ( EWY ): +1.81%

2.iShares MSCI Taiwan Index ( EWT ): +1.52%

3.iShares MSCI Poland Investable Market Index ( EPOL ): +1.63%

4.iShares S&P Asia 50 Index ( AIA ): 1.04%

5.iShares MSCI All Country Asia ex Japan Index ( AAXJ ): +0.72%

6.iShares MSCI Hong Kong Index (EWH): +0.54%

7.iShares MSCI Emerging Markets Index (EEM): +0.4%

8.Market Vectors Africa Index ETF (AFK): +0.39%

9.Market Vectors Indonesia Index ETF (IDX): +0.24%

10.iShares MSCI Netherlands Investable Market Index (EWN): +0.06%

The benchmarkiShares MSCI EAFE Index (EFA), tracking developed foreign markets, was nearly flat, +0.04%.

Economic data from China lifted expectations that the country will loosen monetary policy by the end of September to support its economy, which would also ripple to its trading partners.

Chinese factory output fell in July to its weakest level in just over three years while retail sales growth was slower than expected, Reuters reported.

Monty Guild, chief investment officer and founder of Los Angeles-based Guild Investment Management, is bullish on U.S. and foreign markets. Guild and his colleagues explained to clients in a note today that central banks around the world are pumping money into their banking systems to boost asset prices.

Guild's shop has been buyingiShares FTSE China 25 Index Fund (FXI), +0.20%, which tracks the 25 largest Chinese companies, primarily state-owned enterprises. They are trading at historically low valuations while yielding a 2.6% dividend.

Guild wrote: "It is no secret that China's industrial production and exports have been disappointing. Export activity will remain sluggish as Europe's economy (China's biggest export customer) is shrinking, and the U.S. is in a very slow growth mode. On the positive side, consumer spending is fine and raw material costs are declining.

"A different group (of Communist Party leaders) will take the reins later this year, and we suspect they will bring new stimulus programs to not only boost an economy -- an economy which is already growing at almost 8% -- but to improve China's sagging stock market.

"In addition to more infrastructure spending (Beijing announced a large increase in railroad spending last week), we expect to see more loan growth, more liberalization of markets, a surge in bank-financed spending, and more interest rate cuts on the horizon."

Guild has also been buyingiShares S&P Europe 350 Index (IEV), -0.18%, which tracks the largest companies in Europe. The European markets are heavily shorted and when the crowd is heavily swayed to one side of the market, it usually goes the other way, Guild said. They are also trading at historically cheap valuations.

Follow Trang Ho on Twitter @TrangHoETFs .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: AAXJ , AIA , EPOL , EWT , EWY

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