Morning Notes - Chris Berry, MBA

Emerging Markets Come Back

- Despite the Fed's continued tapering of asset purchases, emerging markets (EMs) have rebounded from their initial sell off.
- Has the crisis vanished as Bloomberg claimed? Or is this a lull in a secular downtrend?
- There are a number of indicators we can look at, but none are more telling than the direction of currencies and interest rates; higher rates will hurt growth prospects.
- Regardless of the crisis talk, EMs will continue to lead global growth, albeit at a slower pace than many would like.
- Does this, coupled with slow and presumably steady growth in the West augur for higher interest rates going forward? This is anathema to Central Bankers.

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