With Thanksgiving tomorrow, I’m sure you don’t have a ton of time for a long update, so I’ll keep this short. The only change in the portfolio today is that I’m moving our half position in Petrobras (PBR) to a Hold rating.
Emerging market stocks, as tracked by the MSCI Emerging Market ETF (EEM) aren’t making much progress. But, and this is important, they aren’t losing much ground either, even as U.S. growth stocks are taking it on the chin. The situation with Chinese ADRs, as seen in the Golden Dragon China ETF (PGJ), is much the same, with what looks like a bottom having been started in late October.
The geopolitical situation, especially the Fed’s tightening policy, Brexit negotiations and the trade war between the U.S. and China, hasn’t changed much in recent weeks. It’s a tense time, but emerging market investors apparently have their bets about where they want them.
Alibaba (BABA), our one stock with a Hold rating, bounced nicely from October 30 through November 1, and has held those gains (and even eked out a higher high last week). The company scored excellent numbers with its Singles Day extravaganza, but investors just aren’t ready to work the Chinese end of the risk spectrum yet. BABA looks solid, and I’ll keep its Hold rating. HOLD A HALF.
Of our stocks rated Buy, MiX Telematics (MIXT) is the strongest, holding onto most of its run from three weeks ago that shot it from 13.5 to 18.5. The stock has given back a point, but volume is well under control. I’ll keep the recommendation to Buy a Half position. BUY A HALF.
Petrobras (PBR) slid from 16.5 to 14 a couple of weeks ago when the global price of crude started to decline, but appears to have arrested its correction. I’m going to move our half position in the stock to a Hold rating and watch for any moves below 14. HOLD A HALF.
Vale (VALE) has been under pressure since its peak in mid-October. I’m sure investors are worried about what effect a slowdown in the Chinese economy might have on demand for Vale’s iron ore. I’d like to see VALE hold up at 14, and any close below that will likely cause a change of rating. BUY.
The stocks on our watch list, Baidu (BIDU), Bilibili (BILI), Huya (HUYA), Tencent Holdings (TCEHY) and WNS Holdings (WNS) are all holding up well, with BILI actually showing some signs of wanting to break out of the trading range it has occupied since late August. The company reported its Q3 numbers yesterday and the reaction has been positive. HUYA didn’t react especially well to its November 12 earnings report, but it hasn’t fallen through its late-October low either. I’ll leave all of these stocks on the watch list, with BILI getting a smiley sticker as the best-looking setup should the market get out of its sickbed.
That’s all for now. I hope everyone has a great Thanksgiving!
