No, we don’t think so. While there may be higher-than-typical market volatility around the run-off election on October 30, we expect economic issues will be the primary driver of Brazilian equities in the months that follow. On balance, we see these issues as neither overly positive nor negative and recommend that investors maintain Brazilian allocations in line with their policy.
No. Emerging markets equities face a challenging macroeconomic environment, but many of the same issues are also plaguing their developed markets peers.
The Federal Reserve is poised to continue lifting interest rates this year. Many investors tend to view tightening Fed policy as a headwind for emerging markets (EM) equity performance and may be tempted to dial back exposure to the bloc, but market history is an inconsistent guide when gauging how EM equities will perform when the Fed raises rates. In this paper, we outline several reasons EM exposures could prove to be diversifying as the current cycle plays out.
Emerging markets ex China equities have underperformed their DM peers this year due, in part, to greater economic and political challenges, which have weighed on sentiment toward the bloc. We expect these issues to persist into next year and are skeptical that EM ex China equities can outperform DM equivalents.
In this paper, we review the Federal Reserve’s new monetary policy framework, consider how current inflation and employment data match up with its goals, and assess what’s implied by the Fed and market outlook.
Fixed income assets and gold advanced, as escalating trade tensions cast uncertainty regarding the global growth outlook and global central banks sounded a more dovish tone; equities and other real assets were more mixed. This chart book presents returns and other market metrics for fiscal year 2019.