This month, Turkey and Japan remain our favored markets, despite heavy volatility during the closing weeks of May. Russia does not see a place in this month’s model, as Germany and South Korea move in on its standing.
Notable Moves to the Upside
- Germany … moved up 3 spots from 6th to 3rd overall. They offer the most balanced profile of any country in the top part of the model. Improving momentum and risk should help Germany be a mainstay for months to come.
- Italy … moved up 5 spots from 26th to 21st overall. While we are still underweight Italy across our strategies, they are showing improving fundamentals, momentum, and valuations.
Notable Moves to the Downside
- Australia … fell 11 spots from 14th to 25th overall. They have one of the worst fundamental makeups and have shown rapidly decelerating momentum. Australia has moved from a neutral weight to an underweight in our model.
- Russia … fell 5 spots from 3rd to 8th overall. In addition to poor momentum, Russia’s fundamentals and risk profiles have started deteriorating, which helped push Russia out of the top 5.