Concepts: International Exposure: Asia vs. Latin America - 01/19/24

Chart of the Day: (01/19/24)

International Exposure: Asia and Latin America

• Our year end Outlook 2024 discussed what I thought would become opportunities in Emerging Markets. 

• After our January 8th Chart of the Day discussing Latin American markets, a client asked me about the Asia Pacific sector.

• International markets looked poised for some relative strength at the end of the year, but have since taken a back seat (again) to the US markets.

• Below you can see the iShares Asia Pacific Dividend ETF (DVYA) in the upper pane. The middle pane displays the Latin America ETF (ILF). We hold a 2% starter position in that ETF at $29. These charts are 12.5 years and each bar represents one month.

• DVYA frankly looks almost poised to break out from a nearly ten-year reverse Head and Shoulders base. While both ILF and DVYA were pushing new highs at year end, both have pulled back a bit in January. 

• The bottom pane shows DVYA Vs. ILF. This reveals that, though Asia outperformed for periods, that outperformance over Latin America peaked in 2015 and again in early 2020. Since then, the relative strength arm wrestle still goes to Latin America. At least for now. 

• We'll need to see these markets pick up against the US before we can take any larger exposure, though I still expect Latin American outperformance over the next few years. 

Please call with any questions.

• Our Chart of the Day is intended to be a standalone technical chart. 

• We use them to highlight open positions, stocks on our watch list, or indicators that we believe are important, or just interesting at the time. 

• It is not a directional market call. 

• Feel free to share them with others who may be interested.