As goes the Dollar as goes volatility and risk assets. After Whirlybird said the Dollar had room to weaken (sort of) we got validation of the call we made BEFORE the Fed: “95 before 110” was the trade named (see Emerging Money last week).
Relative to weightings in the Global MSCI EM Index, there are countries that are hot and some that are not, and it’s not all based on fundamentals. We care because hot markets have priced in good news and cold markets may offer opportunities once a catalyst changes sentiment.
BRICs dominating the news-flow…some good, some overrated, some awful. Let’s also highlight key events for the week, not least the US Payroll number on Friday.
Despite recent equity outflows, emerging markets remain poised to outperform as the Fed reveals clearer signs of its policy.
I have often talked about how Emerging Markets correlate very highly with small cap stocks in the U.S. for a couple reasons:
Emerging Money Daily Audio Preview Call July 22 – On the call today we dig into the outperformance of Emerging Markets versus Developed Markets, another 70 basis points today and we believe the spread continues to trend higher especially with fund allocations being very supportive.
Emerging Money Audio Call – on the site this morning we are talking about the rally in emerging markets we also will dig into more details on the emerging money audio call on how to position for the second half of the year.
Then why even after a 20% move lower today is it still trading like its offering Emerging Markets style growth?