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How Low Can Emerging Markets Go?

By Advisor Perspectives
Capital Markets, Financial Services

Emerging-market (EM) stocks fell in the third quarter and continued to diverge sharply from developed-market equities. While it may be too soon to buy into the weakness, investors should watch for signs that could herald a quick rebound.

US, European and Japanese stocks have all advanced this year. But the MSCI Emerging Markets Index has tumbled in local-currency terms—and even more in US-dollar terms (Display below, left). EM returns have been dragged down by Turkey’s currency crisis and concerns that China’s challenges could be aggravated by the escalating trade war with the US. Investors are asking whether the sharp pullback since January will continue and are watching for signs of contagion to other markets.

Read more at Advisor Perspectives.

Photo: JD Hancock

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