Everyone’s focused on China, but don’t forget about Mexico.
That was a message on this week’s Market Action webinar, and so far it’s been playing out.
In case you missed it, officials on both sides of the border have suggested a deal is close. They include White House advisers Larry Kudlow and Kevin Hassett, along with Mexican Economy Minister Ildefonso Guajardo.
Mexico is the fourth-biggest trading partner for the U.S., running a $71 billion surplus last year. President Trump has worked to renegotiate portions of the North American Free Trade Agreement (NAFTA) before current Mexican President Enrique Pena Nieto leaves office on December 1.
Interestingly, the country’s decoupled from other emerging markets as talks progressed. The chart below of the iShares MSCI Mexico ETF (EWW) shows a comparison against the broader iShares MSCI Emerging Market ETF (EEM). Notice how much EWW outperformed in recent months as worries about Turkey and China hit other global indexes.
By the way, our webinar listed two other noteworthy stocks tend to follow sentiment in Mexico aside from EWW: telecom company America Movil (AMX) and railroad operator Kansas City Southern (KSU). All three symbols outperformed the wider market yesterday.