EEM Stock Recent News

Emerging markets have taken solace in the view that the U.S. hiking cycle is over, helping deliver strong returns in 2023. Slowing global inflation has been due to sharply lower core goods inflation, while service prices have remained stickier.

By Ed Agostino After the great financial crisis, China's appetite for commodities and technology fueled a global economic recovery. The rest of the world recovered and then grew, largely on the back of China's incredible transformation.

The Fed's expected normalization policy was the bullish catalyst for EEM. However, the Fed signaled a data-dependent delay in the expected cuts. Thus, EEM does not have a positive catalyst for now, which is also reflected in a strengthening USD.

EEM, the ETF that tracks iShares MSCI Emerging Markets, has performed poorly over the past 10 years, but may present a contrarian buying opportunity. The underperformance of EEM is partially related to the value of the US dollar and the weakening Euro, which reflects weak global economic growth. The upcoming interest rate normalization policy by the Fed could be a positive catalyst for emerging market stocks, including EEM.

Global shares experienced a slump on Jan 16, 2024 in response to fresh economic data that heightened concerns about China's economy. Also, bets over imminent Fed rate cuts weakened.

Emerging markets will also be looking closely at economic conditions in mainland China, which will be a key determinant of broader emerging market growth in 2024. A key reason for diverging emerging and developed market performance was the marked variation in demand conditions.

Emerging market ETF investing can gain steam this year due to undervaluation, likely halt in Fed rate hikes, falling EM inflation and higher growth rates (than developed economies).

Mexico and Brazil are heading into a favorable interest rate backdrop already in a strong position.

This is a great time to examine the weekly charts of the Economic Modern Family. We like that timeframe for now with only a short number of trading days left.

Emerging markets have underperformed the S&P 500 for the past decade, but there is potential for a catch-up due to cheap valuations. The iShares MSCI Emerging Markets ETF provides easy access to over 1,200 emerging market stocks and is dominated by China, India, and Taiwan. As China goes, so goes EM. The Chinese government is expected to implement additional stimulus measures in 2024, which could boost the EEM ETF.