So, TACO Tuesday…

Trump always chickens out, right? Wrong.

The recent viral acronym painting Trump as weak and inept is just another tactic by the mainstream media to reduce Trump’s credibility and make it seem like he doesn’t know what he’s doing.

But there is one key piece of information to remember…

It’s never smart to throw out the baby with the bathwater. We can’t just say that everything happening as a “result” of the TACO allegation is incorrect.

Case in point? It’s impossible to deny that the “Sell America” trade has been working.

A weaker dollar, tariff pressure, and manufacturing slowdowns have been contributing to money flowing out of U.S. Treasuries.

That’s why it’s no coincidence that eight of the 10 biggest gainers this year are in Europe — and that it’s continuing now as I write this.

So, time to flood to European stocks, right? Well… not quite.

What this equation gets wrong is a common mistake we all make when it comes to trading and investing: if it’s “Sell America,” it’s not simply just “Buy everything else.”

Capital disperses outward in different places. In this case, all economies and stock markets around the world are equal.

Right now, there are three international markets I’m targeting — places no one is looking — that will outperform in the months to come.

And not a single one of them is in Europe.

#1: Vietnam

Back in early March, we highlighted the VanEck Vietnam ETF (VNM).

The story was simple: Vietnam was positioned to benefit from the U.S.-imposed tariffs on China. Many tech companies were already well-positioned following the tariffs during Trump’s first term.

Nvidia also announced the construction of a new R&D site in Vietnam. The sun was shining on the Land of the Blue Dragon. 

More importantly, from a trading perspective, VNM was hitting new highs and registering its first overbought momentum reading in over a year. Price had just ripped through a yearlong downtrend line. And the risk-reward profile was heavily skewed in favor of the bulls. And

Then came the tariffs…

As resilient as Vietnamese equities had been in recent months, they were no match for the global tariff shock.

But a funny thing happened…

VNM snapped back with the same vigor that drove it to new lows. In fact, it has rallied 35% since the market bottomed on April 9th, while the S&P 500 has gained a little more than 20% following its respective trough.

Vietnam remains a buy in my book and will likely provide excellent trade setups over the next 5-10 years.

#2: Brazil

Of all the emerging market plays, the iShares MSCI Brazil ETF (EWZ) is easily my favorite heading into the back half of this year.

Here’s why…

EWZ retested its 2020 low last December. It’s up 22% year-to-date (so it’s outperforming the S&P 500). And price is nearing a 17-year downtrend line (dark blue line).

Check out how many times EWZ has challenged the trend line since its ‘08 peak. The more times a boundary like this is tested, the higher the likelihood it will break. I think it’s only a matter of time before Barzilian stocks ramp to new highs. Gold agrees.

Notice EWZ’s ripper of a rally (roughly +1,700%) during gold’s last bull run. As long as gold continues to print new highs, I bet Brazilian stocks will ultimately post a rally similar to the one in the early 2000s. 

#3: China

Before you scroll over the next chart, please hear me out…

China is a killer buy at current levels.

To be clear, I’m not supporting the People’s Republic as the next global superpower. Entering a long position in the iShares China Large-Cap ETF (FXI) represents a trade and an opportunity to profit, nothing more.

Long China isn’t an investment or a political statement. It’s a tactical trade setup…

Odds favor the bulls if FXI is trading above its June 2022 highs. It’s that simple.

Take another look at the above chart and then pull up the ARK Innovation ETF (ARKK). They’re the same chart.

I bet most American investors wouldn’t consider FXI, but would buy ARKK in a heartbeat. You must overcome these biases to sidestep the “Sell America” carnage.

Embrace the trader mentality and approach these emerging market ETFs the same way you would any other growth stock — get in, get out, and move on to the next trade.