Overseas Markets Outperformed US YTD; China Exuberance Fuels Buying

Author: The Arora Report | October 27, 2025 11:53am

Overseas Markets Outperforming

Please click here for a chart of SPDR S&P 500 ETF Trust (NYSE:SPY) which represents the benchmark stock market index S&P 500 (SPX) compared to Ishares Msci South Korea ETF (NYSE:EWY), VanEck Vietnam ETF (BATS:VNM), iShares MSCI Mexico ETF (NYSE:EWW), iShares China Large-Cap ETF (NYSE:FXI), and Ishares Msci Taiwan ETF (NYSE:EWT).

Note the following:

• The chart shows SPY has produced 16.06% gain year to date, but overseas markets have done significantly better.
  • South Korea ETF (EWY) has produced 79.82% gain year to date.
  • Vietnam ETF (VNM) has produced 57.73% gain year to date.
  • Mexico ETF (EWW) has produced 40.01% gain year to date.
  • Hong Kong ETF (FXI) has produced 32.99% gain year to date.
  • Taiwan ETF (EWT) has produced 27.92% gain year to date.
• The chart shows our buy signal on Korea, Vietnam, Taiwan, and Mexico near the April lows. 
• The chart illustrates the merit of looking beyond the U.S. borders and diversifying overseas.  In our analysis, this is more important than ever due to continuing attempts by the U.S. government to debase the dollar and use financial repression to keep the economy going.
• Investors need to remember the only free lunch in investing is proper diversification. 
• This morning there is aggressive buying in the stock market on euphoria that is breaking out as the U.S. and China have agreed on a framework for the trade deal.
• President Trump and President Xi are meeting in South Korea on Thursday to finalize the deal.
• President Trump has signed trade deals with Thailand and Malaysia that include rare earth minerals.  There is also speculation that after the trade deal is signed with China, China will start dumping rare earth minerals again.  This is bringing in selling in rare earth stocks such as MP Materials Corp (NYSE:MP), USA Rare Earth Inc (NASDAQ:USAR), Critical Metals Corp (NASDAQ:CRML), American Resources Corp (NASDAQAREC), and Energy Fuels Inc (NYSEAMERICAN:UUUU).

Argentina

Trump ally Javier Milei won a decisive victory in the election.  In the days leading up to the election, President Trump supported Milei's government with a $20B currency swap and a promise of another $20B from sovereign wealth funds and banks.  President Trump was explicit that U.S. support was contingent upon Milei winning the election.

Milei's election win is cementing the tilt in many parts of the world to the right.  Milei describes himself as an anarcho-capitalist.

On the international stage, the result of the election in Argentina is being seen as another big win for President Trump.

Stocks in Argentina are rocketing.  As full disclosure, we have a signal on Global X MSCI Argentina ETF (NYSE:ARGT).

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, It is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are positive in S&P 500 ETF (SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Gold

Gold is seeing selling on the U.S. China trade deal.

Bitcoin

Bitcoin (CRYPTO: BTC) is seeing buying on euphoria over the U.S. China deal.

What To Do Now

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.  A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.  Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

Posted In: $BTC AAPL AMZN ARGT CRML EWT EWW EWY FXI GLD GOOG META MP MSFT NVDA QQQ SPY TSLA USAR VNM