Emerging Market Bond (And Stock) Rout
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Jason Goepfert
Published: 2018-06-20 at 15:15:59 CST
This is an abridged version of our Daily Report.
Emerging market bond rout
U.S. high-yield bonds have outperformed emerging market bonds by 7% in 50 days.
Such wide spreads have led to rallies in emerging market bonds more than U.S..
Stock rout, too
Emerging market stocks have lagged U.S. stocks by 8% through mid-year. Other bouts of underperformance led to further losses for emerging market stocks.
Short-term exhaustion
While lagging emerging market stocks tend to continue to lag through year-end, there can be periods where they shine. Price action like Tuesday and a huge outflow from the EEM fund on Monday suggest we may be about to see that.
Bears can’t gain traction
The S&P 500 fund, SPY, has gapped down at the open then closed higher than its open for the past 3 sessions, frustrating bears. It’s rare to see a string of 3 such days in a row, with only 10 signals since the fund’s inception.
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The post titled Emerging Market Bond (And Stock) Rout was originally published as on SentimenTrader.com on 2018-06-20.
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