Trader sees opportunity in one region


It’s not simply the U.S. in sell-off mode.

European and Asian markets, and the ETFs that mirror these areas, have been additionally in the crimson to start the week because the unfold of the Covid delta variant raised fears over the tempo of the worldwide financial restoration.

The INDA India ETF, EZU eurozone ETF, and MCHI China ETF, for instance, have been all sharply decrease on Monday. Those three have additionally underperformed the S&P 500 in 2021. Most Asian markets fell again Tuesday, however main European indexes have been flat but in positive territory on Tuesday.

The near-term outlook seems bumpy, however there may be one region that presents opportunity over the long term, in keeping with Boris Schlossberg, managing director of FX technique at BK Asset Management.

“I really like Vietnam as a long-term hold,” Schlossberg advised CNBC’s “Trading Nation” on Monday. “It’s a booming economy, great demographics, 70% of the population is 35 or under, the government has really improved business conditions in the country, a huge amount of foreign direct investment is coming into the country as a result of the fact that people want a manufacturer outside of China and diversify their risk.”

The VNM Vietnam ETF has pulled again this month because the variety of new day by day circumstances of Covid and the seven-day common in the nation have surged. That ETF is down almost 10% in July.  That pullback presents an opportunity to Schlossberg.

“Vietnam is an amazing place both as potentially a manufacturing hub, but also a huge tourist destination,” he stated. “If you have a 12- to 24-month outlook, it’s going to be a very, very strong play in Southeast Asia. It’s really going to be the star of Southeast Asia.”

Ari Wald, head of technical evaluation at Oppenheimer, is sticking stateside somewhat than wanting abroad for opportunity.

“We recommended clients tilt further towards the U.S. through this,” Wald stated throughout the identical interview. “A concentrated position towards the U.S. has done better when breadth has narrowed, and I think that we’re at one of those points where equity breadth is under pressure.”

The S&P 500 has climbed greater than 13% in 2021. By comparability the ACWX All Country World Index excluding the U.S. is up 5%.

“We’ve got seasonal headwinds here, so on this pullback I’d be looking at U.S. stocks, I’d looking at large caps and high earnings growers,” stated Wald.

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