Markets fell today despite one of the biggest IPOs in recent history. With Facebook making its debut, news from global equities was somewhat overshadowed.
As has been discussed frequently in the investment community, the Brazilian real continues to weaken as the result of government and central bank policy designed to decrease the value of the currency in order to prop up exports. But is the strategy working? Nomura analysts are under the impression that Brazil (EWZ, quote) will continue to grow but that the rate will not be as impressive under Dilma Rousseff as it was under Lula da Silva, whose administration more readily embraced pro-liquidity policies.
While most emerging market economies are suffering as a result of euro zone problems, Mexico is comparatively thriving. The Mexican economy (EWW, quote) is highly reliant on the United States economy; as a result, when the U.S. economy does well, so does Mexico. Given that the U.S. is faring relatively well while economies around the world are floundering, it’s less of a surprise that Mexico is outperforming other emerging markets. Investors should continue to watch the health of the U.S. economy for cues about where Mexico will head next.
While Venezuelan president-cum-dictator Hugo Chavez is undergoing cancer treatments, an upstart presidential candidate is starting to gain momentum. Governor of the state of Miranda, Henrique Capriles is looking to unseat the incumbent Chavez. Foreign investors will be keen to see the latter win, as the former has adversely influenced the business climate in this South American state with his state-centric, Bolivarian policies.
South Korean technology conglomerate Samsung Electronics is releasing their third generation Galaxy phone, which the company claims to be an iPhone (AAPL, quote) beater. With nine million pre-orders for the phone, the firm is poised to firmly cement its position as the world’s largest mobile phone manufacturer. Whether the company’s newest product dents the massive sales around the globe for the incredibly popular iPhone remains to be seen.
Recently the issue of Facebook co-founder Eduardo Saverin’s citizenship has dominated the internet. The Brazilian-American currently residing in Singapore is set to make billions of dollars in the wake of Facebook’s (FB, quote) IPO. However, his example raises bigger questions about how Americans are taxed abroad and whether are not such regulations stifle the potential for entrepreneurship in the United States.
Disclosure: Author is net long AAPL; immediate family is net long AAPL and EWZ