Foreign inflows are set to halve to $548B this year and outflows are expected to come in at $540B. With local outflows accelerating, net flows will turn negative.
The flight from emerging markets "has been driven primarily by internal factors, basically reflecting a sustained slowdown in EM growth and amplified by rising uncertainty about China’s economy and policies," the IIF says.
EMs have also been hit by the commodities rout, to which many are exposed. Weak currencies and political turmoil in countries such as Brazil and Turkey are increasing the risks.
While those risks remain high, there is little incentive for investors to return to EMs.
Retail employment grew by 18.2K M/M and 229K Y/Y in March, according to estimates from the National Retail Federation.
Retailers are prepping for a little bit of a snapback in store traffic in Q2 which they hope will help ease pricing and inventory pressures.
Though the winter weather was worse than normal across much of the U.S., there are plenty of execs who have been sounding the warning bell that store traffic trends are in decline due to shifts in consumer behavior - not snow and ice. Q2 could settle the debate.
The negative retail drums keep beating louder this morning with a string of companies (Fred's, Stein Mart, Buckle) showing negative same-store sales for February and Costco showing some uncharacteristic weakness.
The week has also seen RadioShack and Staples decide to close stores en masse and strong hints from other retailers that the promotional stance from the holidays has been tough to shake off.
A survey from Shop.org indicates that 84.2% of retailers have a standard shipping deadline for guaranteed Christmas that lands before Friday, December 20. The timing of Christmas this year (mid-week) played a factor in the drop-dead date for late shoppers.
An interesting side-note from the data was that 21% of retailers polled say they increased their promotion of free shipping with no conditions this year. It's another sign that although late-season sales might come in after all for retailers, margins could be razor-thin.
ShopperTrak reports retail sales fell 0.8% Y/Y last week on traffic that was almost 20% thinner as the shoppers that did venture out were all business.
The retail-watching group says the wintry weather mix was a big factor and predicts a decent snap back in traffic this week.
The opposite effect could be in play with Amazon (AMZN) and eBay (EBAY -0.9%). The e-commerce tracking data for the two companies continues to dazzle as the typical post-Cyber Monday lull has been avoided. If there is a minor dip, analysts think it could be this week with decelerating Y/Y sales growth from the pair's dizzying pace.
The "Emerging Markets Consumer" theme gets another player with the launch of WisdomTree's (WETF +0.4%) Emerging Markets Consumer Growth Fund (EMCG) with an expense ratio of 0.63%.
An issue with mainstream benchmarks such as the MSCI Emerging Markets Index (EEM -0.7%) is their reliance on giant, state-backed companies, and WisdomTree - along with others - are attempting to capitalize. EMCG's weighting assures an emphasis on small companies. Also, EMCG excludes the energy and materials sectors, while EEM has 20% exposure. Of 250 stocks in the EMCG, 150 are consumer staples or discretionary names.
The biggest player in the emerging consumer field is Emerging Global Advisors' Emerging Markets Consumer ETF (ECON -1.1%) which has smoked the EEM in its short history - a 3-year annualized yield of 10% vs. EEM at 0.3%.