February 12, 2024

 

(INDIA SHINES AMONGST EMERGING MARKETS)

February 12, 2024

 

Hello everyone,

The S&P500 has hit 5000.  The question now is do we consolidate here or just march higher?

My advice:  Watch for volatility and a possible very healthy correction after the Chinese New Year festivities close.

Going forward, better-than-expected earnings results as well as signs of easing inflation, a strong labor market, and a more resilient economy point to a rosier outlook than many anticipated going into 2024.  Therefore, when we have a market weakness, look at it as an opportunity to add exposure if you haven’t already. 

More big earnings results in the week ahead include Arista Networks, as well as Marriott International, Occidental Petroleum, Deere, and Applied Materials.

Wall Street gets more inflation data, and investors expect it will continue to confirm the recent downward trend.  Last Friday, stocks rose after December’s inflation reading was revised even lower than previously reported.

Gold – we are in corrective consolidation awaiting a breakout.

Bitcoin – uptrend in progress.  Heading towards $57,000.  The bigger picture remains bullish, with the potential to advance to extend toward the Key $69,000 resistance and beyond.

 

Week ahead calendar

Monday Feb. 12, 2024

2 p.m. Treasury Budget (January)

Australia Consumer Confidence Chg.

Previous: -1.3%

Time: 6:30 pm ET

Earnings:  Arista Networks, Waste Management

 

Tuesday Feb. 13, 2024

6 a.m. NFIB Small Business Index (January)

8:30 a.m. CPI (January)

Earnings: MGM Resorts International, Airbnb, Welltower, Akamai Technologies, Marriott International, Howmet Aerospace, Molson Coors Beverage, Coca-Cola Co., Hasbro, Ecolab, Biogen

 

Wednesday, Feb. 14, 2024

UK Inflation Rate

Previous: 4%

Time: 2:00 am ET

Earnings:  Occidental Petroleum, Albemarie, Kraft Heinz, Generac.

 

Thursday, Feb. 15, 2024

8:30 a.m. Continuing Jobless Claims (02/03)

8:30 a.m. Export Price Index (January)

8:30 a.m. Initial Claims (02/10)

8:30 a.m. Empire State Index (February)

8:30 a.m. Philadelphia Fed Index (February)

8:30 a.m. Retail Sales (January)

9:15 a.m. Capacity Utilization (January)

9:15 a.m. Industrial Production (January)

9:15 a.m. Manufacturing Production (January)

10 a.m. Business Inventories (December)

10 a.m. NAHB Housing Market Index (February)

UK GDP Growth Rate

Previous: 0.3%

Time: 2:00 am ET

Earnings: Deere, Applied Materials

 

Friday Feb. 16, 2024

8:30 a.m. Building Permits preliminary (January)

8:30 a.m. Housing Starts (January)

8:30 a.m. PPI (January)

10 a.m. Michigan Sentiment preliminary (February)

 

If we focus on emerging markets, India seems to come out on top for investors looking for long-term growth.   And one ETF appears to have done a great job at capturing those returns compared to its peers.

I’m talking about the Wisdom Tree India Earnings ETF (EPI).  It has nailed a total return of 6.6% through Feb. 8, according to FactSet, and is up 18.7% over the past three months.

That makes it the best performing of the five biggest India ETFs with the iShares MSCI India ETF (INDA) and the Franklin FTSE India ETF (FLIN) both up less than 4% year to date.  The Wisdom Tree fund is also beating the S&P 500 which is up less than 5% over the same period.

The Wisdom Tree fund has been a long-term winner as well, with an average annualized return of roughly 12% over the past decade.

Jeremey Schwartz, Wisdom Tree's global chief investment officer explains that EPI is based on an index that weights stocks by their total net income, which keeps investors from overpaying for growth.

What makes India particularly attractive is its population profile, which is indicative of a long-term growth story.

EPI’s outperformance could also be explained by its broader collection of stocks.  The fund has more than 400 holdings, including some smaller-cap companies, significantly more than some of its key competitors.   Schwartz points out that most of the large-cap indexes for India today hold 50, 75, or 100 stocks.  EPI is out in front with 400. The fund holds $2.5 billion in assets.

Something to note is that the fund itself has an expense ratio of 0.85%.  The iShares INDA ETF has a 0.65% expense ratio and Franklin Templeton (FLIN) comes in lowest at 0.19%.

 

 

 

 

Cheers,

Jacquie