Watch for a big bounce in the emerging markets vs. domestic
markets indexes today as suddenly the view is China is making major
structural changes towards a market economy.
[caption id="attachment_76554" align="alignright" width="300"]
Shenzen cellphone market, China[/caption]
While I was pleased with last week's Plenum I have taken a much
more realistic view on actual change and the timing of that
Having said that, emerging markets (
) were oversold on the Fed and fund flows sent up a very clear
flashing BUY signal. As I stated on Fast Money on Friday, no
emerging market rally of significance can exist without China.
Shanghai was +3% last night at October highs. Chinese
consumer focused stocks remain in the spotlight. Chinese
internet stocks have been ripping and in some cases with
Watch for a few of the heavyweights in Chinese ETF
) to also outperform. China Mobile (
) could just be one of them.
Meanwhile the rest of emerging markets are also getting
attention and upgrades form the street.
Perennially cheap Russia (RSX, quote) was just upgraded by
I would avoid crowded trades like Mexico and South Africa and
look to places like Turkey and even Indonesia they have the ability
to rally back here.