Both EEM and EWZ rose last week with emerging markets up 0.35% and the Brazilian market gaining over 2% on the week. EWZ continues to try to play some catch up with the other emerging markets after a dramatic sell off in late spring / early summer of this year. EWZ bottomed out on June 28th this year and is up almost 13% since putting in that low. Over the same period of time EEM (which does have exposure to Brazil) is up about 16%. Just to give a comparison, the S&P 500 is up a little under 8% since June 28th.
With the bullish run in EEM and EWZ their respective volatility indexes have experienced a steady down trend. To make things interesting this week I’ve added an extra component to the graphics this week. A curve comparison of June 28th to December 21st appears first. What a difference six month and a bull market can make in the world of volatility. VXEEM is about 28% lower and VXEWZ has dropped 30%. A final note – notice the shape of the curves has not changed much, just the absolute levels.