Helping Self-Directed Investors Succeed Blog - Growing South East Asian Economy to Watch as of May 31st, 2019

Growing South East Asian Economy to Watch as of May 31st, 2019

May 31st, 2019

US-China Trade war appears to be entering its next phase and there is no shortage of uncertainty on the outcome. While this war is intensifying, President Trump has fired another salvo at Mexico threatening to increase tariffs on the country's imports effective June 5th.

Investors don't react well to uncertainty and this is clearly showing on the major US Benchmarks. The Dow 30 Tracking ETF - DIA has decisively moved below its key 40-week SMA and S&P 500 Tracking ETF - SPY and NASDAQ Tracking ETF - ONEQ are hovering just above this key metric. The SPY is now up +10.14% for this year but it had given up a whopping 6.38% this month. DIA is up +6.44% for the year and ONEQ is up +12.68% year-to-date. It fell -7.94% this month.

The impact of US-China Trade war has been felt in many South East Asian economies. Especially, South Korea, Singapore and Malaysia economy ETFS have not been performing well in recent months. But some economies appear to have bucked the trend so far and self-directed investors may want to keep an eye on them. One such economy is Phillipines. The iShares Phillippines ETF - EPHE has managed to gain +0.72% this month and for the year it is up a respectable +10.38% almost close to wherw the SPY is now.

Phillipines is aggressively cutting interest rates to boost economic growth as its inflation pressures have appeared to ease. The economy is targeting a consistent 6% growth which is healthy if not robust. The governor of country's Central Bank has stated there is very little impact of US-China trade situation on its economy and open to more rate cuts as necessary.

From a technical perspective, EPHE is still in consolidation mode. After logging a high price of $35.63 in early February of this year, ETF managed to get closer to this but pulled back and is again trying to reach that level. A clear break-out above these levels is likely to be a positive for bulls.

Self-directed investors will want to keep a close eye on this ETF and see how price action is developing in the coming weeks.

Good Luck and Happy Investing!

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