Security
EEM: Emerging Markets Research Hub
The EEM ETF is currently undergoing a structural regime shift, transitioning from a long-term laggard to a leader in the global AI hardware supply chain. Key drivers for this outperformance include heavy concentration in Taiwan and South Korea—which now account for approximately 25% and 19% of the index respectively—overshadowing China's former dominance. Technical analysis suggests that EEM has decisively broken a 15-year relative downtrend against the S&P 500, with institutional price targets now established between 74 and 79. While the 'AI capex supercycle' fuels robust earnings growth, some analysts warn of potential fragility as dealer gamma reaches historic highs and put-call skew remains extremely low. Despite these risks, analyst consensus remains positive, with significant upward revisions to 2026/2027 earnings forecasts and an overall MSCI EM index target hike to 1850. Consequently, research trends favor long exposure to North Asian tech hubs over Southeast Asian peers and oil-exporting markets.
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Emerging Markets: Emergent Leaders
Emerging markets are experiencing a significant technical breakout driven by AI hardware dominance in North Asia, rising commodity prices, and US dollar weakness. The iShares MSCI Emerging Markets ETF has reached new all-time highs, signaling a potential long-term trend reversal against US equities.
EM Weekly Kickstart
Goldman Sachs has raised its 12-month MSCI EM index target to 1850, driven by significant earnings upgrades in North Asian tech and AI sectors. The report highlights that EM earnings are currently tracking well ahead of consensus, led by Korea and Taiwan.
Options Market Flip: Gamma and Skew Extremes
The options market has flipped from extreme negative to high positive gamma, signaling a shift from fear to AI-driven euphoria. While fundamentals like earnings remain strong, the extreme complacency in skew levels suggests increasing market fragility.
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