Political victories in India (EPI, quote) and opinion polls in Brazil (EWZ, quote) are carrying Emerging Market equities higher this morning.

emerging-markets-BRIC-MINTDespite our concern that political hopes equal economic reform, in the near term we like owning the spread of MSCI Emerging Market (EEM quote) v S&P 500 (SPY quote) to .2300 level before we take profits on technical resistance.

China (FXI, quote) remains a potential catalyst for Emerging Markets to drive outperformance. We do not expect last night’s comments by President Xi Jingping to result in near term stimulus measures, but we feel any surprise positive macro from China will catch markets off guard.

emerging market

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