China and Spain: Primed for Profits?

11/21/2013 10:00 am EST

Focus: GLOBAL

Chris Versace

Editor, PowerTrend Bulletin, Growth & Dividend Report, and PowerTrader

There are always bull markets out there and it's my job to find them for us; two that are primed are China and Spain, explains Chris Versace, editor of PowerTrader.

China's non-manufacturing Purchasing Managers' Index (PMI) for October was revealed to have risen to its highest level this year.

The non-manufacturing PMI rose to 56.3 in October from 55.4 in September, according to the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing.

Last week, the October manufacturing Purchasing Managers' Index, from HSBC and Markit Economics, rose at the fastest pace since March. Driving that improving manufacturing picture was a rise in both new orders and new export orders.

As the picture of the Chinese economy continues to firm, let's participate in the improving outlook by buying shares of iShares FTSE/Xinhua China 25 Index ETF (FXI).

We recommend doing the same with Spain. We also just learned that Spain, the euro zone's fourth-largest economy, exited its two-year recession during the September quarter.

Granted, the country's economy grew modestly quarter over quarter, but the recovery from recession has come faster than expected. That led investment ratings firm Fitch to raise its outlook on Spain's debt to stable from negative.

Markit Economics released its October manufacturing PMI for Spain, which revealed the sharpest rise in new order activity since February 2011—that's more than two and a half years!

As the outlook in the Spanish economy continues to improve, let's be sure to participate by buying shares of iShares MSCI Spain Capped ETF (EWP), which tracks the Spanish equity markets.

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