Russia’s loss is Canada’s gain, at least in terms of commodities exports.
“As trade with Russia halts, countries turn to Canada,” reports The Wall Street Journal. “Canada produces many of the same commodities as Russia and countries are lining up to broker deals.”
Mr. Market’s likes the sound of that. The iShares MSCI Canada ETF (EWC) traded up again today, reaching a new record-high close. Note: all charts shown are weekly.
Speaking of new highs, the iShares Latin American 40 ETF (ILF) continues to run hot. Although this commodities-biased equities fund edged down today, it remains just slightly below a pandemic high.
Meanwhile, this year’s pop in value stocks (of the large-cap persuasion) appears to be running out of steam… again, based on the ratio for IWD:IWF, a pair of ETFs that serve as value and growth proxies. A year ago, a revival appeared to be brewing for the value factor only to hit a ceiling and reverse course. A repeat performance may be in progress for 2022 following a sharp run higher for value stocks relative to growth. Until this ratio moves decisively above its last two peaks, the outlook for a value rebound remains weak. If you’re inclined toward optimism in this corner, you might prefer to focus on the possibility that the long-runing relative slide may be bottoming.
The reflation/inflation trade has had an incredible run over the past two years, based on the ratio for iShares TIPS (TIP): iShares 7-10 Year Treasury (IEF). It’s not obvious that the upside momentum has run its course, but the latest leg up — an extreme move higher — suggests caution. Even a roaring bull market isn’t immune to reversal now and again. All the more so when the trade in question this year has been running hotter than a stir fry in a heat wave.
Finally, the demise of the US stocks in relative performance terms vis-a-vis the rest of the world has been a popular forecast in some circles for many years. So far, those forecasts have been as relevant as ice cubes in Alaska. Has anything changed this year? Not yet, or so the trend for the US Stocks:World Stocks ex-US ratio suggests, based on a pair of ETF proxies (VTI:VEU). There’s been a surge in market volatility generally this year for equities, but it’s still not obvious that the long-running leadership edge for US equities has lost its mojo. ■