Can’t Beat Emerging Markets

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Can’t Beat Emerging Markets

Published on 04/09/2026

Source: Market Mosaic Daily, by CMT Association

Emerging market stocks are outperforming everything.

Sections

Emerging Market Stocks
US Smallcaps
High Beta Stocks

Emerging Market Stocks

Emerging market stocks are outperforming everything. US largecaps, smallcaps, international, crypto, you name it. The asset class is +10% year-to-date and displays no sign of letting up. The perfect storm of tailwinds persists. Low valuations, high earnings growth, commodity demand, weak dollar, positioning– it’s all working. Not to mention the ratio charts of EEM/ACWX and EEM/SPY are indicating a true change of trend. EEM/ACWX is consolidating atop of well-defined support and EEM/SPY is eyeing new year-to-date highs. A lot to like from a relative strength perspective!

US Smallcaps

Just like Emerging Markets, US Smallcaps are benefiting from the rotation away from US Mega-caps. However, from a relative trend perspective, the IWM/SPY ratio has a lot more to prove. The ratio is yet to form a structural new high, as it remains below key resistance. On the plus side, the slope of the 200-day simple average is the most positive since the COVID run up. Risk appetite is certainly there!

High Beta Stocks

High Beta stocks are approaching new relative highs. This isn’t something you see at the onset of a bear market. Through the latest S&P 500 correction, high beta stocks have held up exceptionally well. This is mainly due to the resilience of the semiconductor industry. Emerging markets, smallcaps, and high beta are all outperforming the broad market. This isn’t just rotation away from mega-cap tech - it signals genuine risk appetite. And that’s what bull markets are built on.

Shared content and posted charts are intended to be used for informational and educational purposes only. CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. CMT Association does not accept liability for any financial loss or damage our audience may incur.

About the Author | Shane C. Murphy, CMT, CFP

Shane Murphy is an Associate at Michael Roberts Associates Inc. an independent wealth management firm located in Syracuse, NY. Prior to that, Shane worked in portfolio construction and research for an independent RIA. He also has experience in municipal finance, working at an independent municipal advisory firm. Shane attended Le Moyne College in Syracuse, NY, graduating honors cum laude with a Bachelor of Science degree in Finance and Business Analytics. Shane holds a Masters of Business Administration with a specialization in business analytics from Le Moyne College. He holds his Series 7 and 66 FINRA licenses and has received the designation of Chartered Market Technician (CMT) . In his spare time, Shane enjoys being out on the golf course, exercising and spending time with his family.