Risk-on breakouts for EMB vs. AGG

Our latest Charted Market Insights (Oct 28) highlighted bullish setups for Emerging Markets (EEM) relative to the S&P 500 (SPY) and MSCI EAFE (EFA). Fitting with this theme, the iShares JP Morgan USD Emerging Markets Bond ETF (EMB) shows a bullish risk-on trend versus the iShares Core U.S. Aggregate Bond ETF (AGG).

EMB bullish relative to AGG: Breakouts provide risk-on confirmation

The iShares JP Morgan USD Emerging Markets Bond ETF (EMB) shows a bullish risk-on trend versus the iShares Core U.S. Aggregate Bond ETF (AGG).

The EMB/AGG ratio bottomed with the U.S. equity market in April and broke out in late June, aligning with the bullish reversals and breakouts across major U.S. equity indices.

The ratio’s push to new highs in late October reinforces the broader risk-on environment, confirming the new record highs on key U.S. equity indices such as the S&P 500, NASDAQ 100, NASDAQ Composite, and Dow Jones Industrial Average.

Chart 1: iShares JP Morgan USD Emerging Markets Bond ETF (EMB) relative to the iShares Core U.S. Aggregate Bond ETF (AGG)