A quick BRIC 101 guide
Of the many buzzwords that get thrown around when discussing emerging markets, “BRIC” may be the most common. What is a BRIC, and why is it important?
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Of the many buzzwords that get thrown around when discussing emerging markets, “BRIC” may be the most common. What is a BRIC, and why is it important?
Negative sentiment on China continues to drag other emerging markets down, and will likely keep on doing so until more concrete stimulus measures are announced. It’s not all doom and gloom though, as Russia, India, and Mexico can attest.
China has emerging markets investors worried after its rate cut last week and deteriorating economic data, but expectations of further Indian stimulus are growing, while Russia’s economy is thus far acting unconcerned with cratering oil prices.
Emerging markets have been muddled at best over the last week, but Russia and India have been surprising to the upside despite manifest economic headwinds for both.
Among emerging markets, China is continuing to rise on easing expectations from the People’s Bank of China, India continues to struggle, and Russia is defying the price of oil.
Despite global investors scurrying for the hills after May’s poor economic data from China and the U.S., the BRIC emerging markets (including South Africa) seem to be either stabilizing or coming back.
Investors are crying out for leadership from China as emerging markets continue to be beaten down by euro zone woes and China’s slowing growth. However, should there be any recovery in global cyclical growth the BRIC countries are poised to take off from oversold levels.
Most major emerging markets have been on the defensive in recent weeks, but as sentiment turns against China, some overlooked countries are coming back into focus; whether by choice or necessity remains to be seen.
U.S. investors often stereotype the Indian economy as a cluster of gigantic technology outsourcing companies. But those who bought into the ETFs that most closely conform to that stereotype would have been left lagging not only the real Indian stock market but Wall Street as well.
After U.S. stocks suffered through the worst week of the year, emerging markets are picking up the baton. We are seeing broad-based leadership from the emerging world, and needless to say it bodes well.