The Week Ahead with Tim Seymour – Asia vulnerable as flows settle down


While the flows of capital out of emerging markets are calming down, Asian markets -- Taiwan and Korea in particular -- still look like the canaries in the coal mine here. These markets are looking vulnerable. Korea is quite simply overbought and there is more weakness to come , so it may not be time to dive into EWY ( quote ) quite yet. Taiwan is not much better, with $556 million in outflows last week from Taipei-specific funds like EWT ( quote ) . Still, I do not see panic in the emerging markets space as a whole. This may be surprising given the ravaged charts in India , Brazil , Chile , Indonesia -- the list goes on, take a look at PIN ( quote ), EWZ ( quote ), ECH ( quote ), IDX ( quote ) -- but foreign exchange rates remain one of the big indicators here. This week, the currencies were champs despite the volatility in the equity and commodity markets. Global tensions did create a " risk off " environment, but instead of a rout, it turned into a moment of truth. To reiterate: emerging markets have recovered from the defensive move we saw starting in January. There are places where you can still pick your spots: Russia ( RSX , quote ), Turkey ( TUR , quote ), Mexico ( EWW , quote ) . . . and even India ( read more ) and Brazil , for the daring. Other stories to keep your eye on as the new week moves into focus: The Brazilian energy commission expects domestic oil and gas production to double over the next eight years, which is a great way to set the stage for Petrobras ( PBR , quote ) earnings tonight. The Russian consumer is still a theme to conjure with for Wall Street's top analysts, as this morning's upgrade of CTCM ( quote ) from Morgan Stanley reveals. Keep oil calm for awhile and you have a great trade in the global car names . Grab your basket, but focus on the beaten up names - which just happen to be the international giants. Might be a minor stutter in the technical set-up, but Chinese spot iron prices just edged down close to 2%. What does this mean for the usual suspects in the iron and steel space? The headlines may have receded, but currency issues are alive and well in places like Vietnam - a thriving economy known for its role in the so-called " CIVETS " group of markets.

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 , International , Stocks

Referenced Stocks: ECH , EWT , EWY , EWZ , RSX

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