As the US threatens to escalate sanctions, the question remains how effective sanctions can be, and what would be the scale of them.
India elections will start on April 7th and last into May 16th. Significant change has been priced into the SENEX (see chart below) into the event. Are investors set up disappointment?
Emerging Market equities are outperforming the SPX today by 1.2% and have now rallied 7.6% in 2 weeks even as the SPX hits all-time highs.
Here are the three events we are watching next week to shape market sentiment and key macro trades:
Spike in volatility today is right on the money but a few days late. Where ya been? We argued last week that the S&P was running into exhaustion levels somewhere north of 9% from the 200mda. We think that headwind would have made sense under any technical scenario.
As I talk to seasoned EM veterans who have been focused on this asset class for 15-20 years through a myriad of political, economic and global macro cycles I am increasingly hearing more and more pessimism on whether investors are finally losing their interest in EM. Hard to believe that people who sat in remote locations around the world in 1998 after the Asian crisis moved into the Russian crisis and LTCM blowing up, are NOW in need of trip to the psychiatrist to review their calling in life.
Today US 10yr yields are breaking below the 200mda for first time since last April. Whats this telling us?