dtblount

What Moving Averages Indicate for Emerging and Developed Markets

Great piece and chart...thanks for posting it. Building upon your bullish signal, are you bullish of Chinese equities in general...or specific sectors?

Emerging Markets: The Return of Decoupling?

AndrewBaker, great comment (and a bit late for me to reply, ha...), but I do not think it will take much to get some of the emerging and frontier markets going again simply due to the size of their GDPs. I agree that eventual decoupling will take hold once organic consumption and demand amongst emerging/frontier nations picks up, but I don't think it all hinges on FULL recovery of the US or any other more-developed economy.

I haven't worked out any of the figures, but I am sure that the marginal demand from various stimulus packages around the world (US, China, etc) will work to magnify economic stability and possibly growth in some smaller raw materials-exporting nations. Of course, any "buy American/British/Chinese" stimulus package cuts down on this effect, but raw materials are another story. For example, if the Chinese gov't decides to build more apartment buildings, they will need copper. Domestically, China is already using up all the copper they produce, so they will get it from elsewhere...Chile, Peru, Zambia, etc. Regardless of China's economic recovery, massive purchases of copper from these nations will definitely have a magnified impact on their respective economies and GDP.

Much of the more-developed world relies on emerging/frontier nations for metals, minerals, ags, etc...and this will only grow stronger with time.


On Apr 01 03:15 PM AndrewBaker wrote:

> Decoupling will happen in time ... but not so much just yet. The
> emerging markets still need to export to us and the west to get the
> growth they want and need. As they improve internally, then their
> own populations will want nicer and better things, and that will
> cause the decoupling effect to happen and show due to their own thriving
> internal economies. It will come, but I'd wait for our recovery to
> show first, then back the emerging economies to shoot ahead.

Emerging Markets: The Return of Decoupling?

Great piece and I really like your optimism. I'm of the same mentality as you...it does appear to be that some decoupling has taken effect.

I'm very bullish on China (of course...but I don't think breakneck growth will last much longer - time for some stability), Chile (copper and fiscal responsibility...not many people seem to know what that is anymore!), Brazil (solid currency prospect, ags, oil/energy), South Africa (gold/platinum, I expect elections to go well, Zuma could be another Lula da Silva, Manuel is likely to stay), Russia (excellent nat'l resources, appears to be bottoming-out), Turkey (solid currency prospect, promising future in global trade and diplomacy due to military strength, geographic location, and population)...and Emerging/Frontier Markets on the aggregate (I like FRN and EEM, the basic ETFs).

I think China will lead the recovery, followed by smaller fiscally-conservative, resource-rich EMs/FMs, and the US (first of the developed nations).

Thoughts/responses?