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Emerging Market Equities Building on Political Base to Outperform Developed Markets

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Political victories in India ( EPI , quote ) and opinion polls in Brazil ( EWZ , quote ) are carrying Emerging Market equities higher this morning.

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In fact the move on this spread from close to .40 in October of 2010 to the lows we saw in mid-December of .1865 has included numerous places where emerging markets looked ready to make a long term outperformance shift.

Despite our concern that political hopes equal economic reform, in the near term we like owning the spread of MSCI Emerging Market ( EEMquote ) v S&P 500 ( SPYquote ) to .2300 level before we take profits on technical resistance.

China ( FXI , quote ) remains a potential catalyst for Emerging Markets to drive outperformance. We do not expect last night's comments by President Xi Jingping to result in near term stimulus measures, but we feel any surprise positive macro from China will catch markets off guard.

emerging market

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


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

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