The US stock market was much higher last week, but the enthusiasm stopped at the border as the iShares MSCI Emerging Markets ETF (EEM – 40.48) lost 0.25% and the iShares MSCI Brazil Capped ETF (EWZ – 43.41) lower by 0.78%. What is good for the United States is not making its way to emerging markets. At least not in the form of higher stock prices as EEM is off 6.7% this year and EWZ has lost 19.8%.
With both EEM and EWZ slightly lower, the respective volatility indexes dropped as well. There are times that VXEEM and VXEWZ seem to key off of VIX more than their underlying equity markets. This past week appears to be one of those instances.