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Grupo Aval Looks Attractive Ahead Of An Earnings Recovery As It Absorbs Pandemic Impacts (NYSE:AVAL)

Mohamed El-Erian recently highlighted a perceived disconnect between emerging market stocks (EEM) and fundamentals on Twitter.

The rebounding emerging markets index is every bit as peculiar as the sharp rebound in domestic indices since the lows of earlier this year, which, despite not showing quite as impressive of a rebound as the S&P 500 (SPY), is astonishingly close to flat for 2020.

ChartData by YCharts

Looking deeper at performance in the United States reveals that, while a large swath of the stock market has showed a substantial recovery from the March lows, some parts have benefited more than others. The equal weight S&P 500, for instance, remains lower on the year, and the mid-cap and small-cap indices have performed substantially worse.

Data by YCharts

The performance of emerging markets also requires investors to look somewhat beneath the surface. Asian emerging markets, which dominate the index, have largely recovered, driven in

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