Image Source: PixabayThe tech-heavy Nasdaq plunged on Wednesday as two big names turned in disappointing report cards for the second quarter. But with a Fed interest rate cut likely in September, we continue to be positive on the equity markets, despite recent volatility. Consider the international stock fund VanEck Africa Index ETF (AFK), suggests Brian Kelly, editor of Money Letter.Google’s parent company Alphabet Inc. (GOOGL) – despite beating expectations on the top and bottom line – reported falling YouTube advertising. And Tesla Inc. (TSLA) reported a 7% year-over-year decline in auto revenue, which pushed that stock down about 11% for the day. The Nasdaq lost 3.6% in trading on Wednesday; the S&P 500 declined 2.3%; and the Dow Jones Industrials finished 1.3% lower.
VanEck Africa Index ETF (AFK)
All our global markets were in the red for my reporting period (July 18-24). The S&P 500 declined 4.2%; the Euro Stoxx 50 dropped 0.6%; the Nikkei 225 lost 4.7%; and the Shanghai Composite moved lower by 2.1%.It is not surprising that previously high-flying tech stocks are targets for profit taking. Toss in a couple of earnings disappointments, and we’re continuing to see investors selling and rotating into “the rest of the market.” We continue to believe in the AI trade and the tech sector in general.Readers must remember that a 5%+ pullback is to be expected a few times each year. We will continue to keep a close eye on economic growth.As for AFK, the fund tracks the MVIS GDP Africa Index. The index includes local listings of companies that are incorporated in Africa and listings of companies incorporated outside of Africa, but that have at least 50% of their revenues/related assets in Africa.My recommended action would be to consider buying AFK.
About the Author
Brian Kelly has enjoyed a long career in newsletter publishing and has maintained involvement with MoneyLetter continuously since 1984. He has been a member of the MoneyLetter Investment Committee for over 30 years.As vice president and product manager for IBC/Donoghue Inc., and IBC USA (Publications) Inc., Mr. Kelly was responsible for all aspects of the MoneyLetter group of products including planning, marketing, fulfillment, customer service, and public relations.More By This Author:Tech Stocks: Sharp Decline? Yes. Out Of The Ordinary? No.Teradyne: What Earnings And The Market Reaction Say About The Semiconductor SectorWhat I’m Watching In This “And Then There Were None” Market
