I am starting to get a lot of questions from investors regarding the sustainability of this rally in Emerging Markets and what can be the drivers for the next leg(s) higher.
EM vs DM: Emerging Markets yesterday kissed their lows again the SPX going back through the crisis, even including a spike down when EM “bottomed” first in the Fall of 2008.
What was recently their secret weapon to outperforming the S&P on EPS is now a headwind but is it a hurricane?
The Emerging Money EM FX Basket (EMFXB) is a GDP weighted index comprised of the eight most volatile primary currencies in EM.
Those EM “have’s” with exposure to either falling commodities, current account issues, political turmoil, or all of the above, are taking down all EM countries, even those who do not have (“have not”) the same exposure to such factors.
Yesterday, on CNBC’s Street Signs, the focus was on the “MINT” economies: Mexico, Indonesia, Nigeria, and Turkey, as they are coined, or “MINTs”.
On Tuesday I will do a piece on CNBC Street Signs (2pm) on investing in Mexico as we cover overall investing in the “MINTs” (Mexico, Indonesia Nigeria, Turkey). Mexico is your safest bet.