Time To Buy Emerging Markets?

Dec. 17, 2018 11:08 AM ETEEM, VWO, IEMG, EDC, SCHE, EDZ, EMF, MSF, ADRE, EEV, EUM, EET, GMF, SPEM, EEMA, EEME, XSOE, DBEM, FEM, HEEM, EWEM, ROAM, ESGE, EDBI, EMLB, FLQE, KALL, EMSA, KLEM, RFEM, EMEM, MFEM, PPEM6 Likes
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Summary

  • It’s not time to jump back onto the long side of Emerging Markets – yet.
  • We've been warning subscribers all year about the risks of a global growth slowdown that would hit Emerging Markets.
  • Whether Emerging Markets become a buy soon depends on the path of the U.S. dollar.

It’s not time to jump back onto the long side of Emerging Markets – yet.

We’re all about rate of change here at Hedgeye. For example, when economic data for markets we haven’t liked become “less bad,” that’s usually a very good time to get involved.

Relative to U.S. markets recently, Emerging Markets have certainly been “less bad.”

Does that indicate it’s time to go long a sector we warned subscribers to stay away from throughout 2018? Not necessarily. Hedgeye CEO Keith McCullough cautions that the signals haven’t improved enough to jump in on the long side.

“Is this the end or a pause in the bear market in EM? That’s going to be determined by the path of the dollar,” McCullough explains in the clip above. “If we thought it was a good time to buy EM and short the dollar, we would make that call. Obviously, we haven’t.”

Watch the full clip above for more.

This article was written by

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Hedgeye Risk Management is an independent investment research and online financial media firm. Focused exclusively on generating and delivering thoughtful investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, un-compromised real-time investment research as a service. We measure ourselves on our core values: Transparency, Accountability, and Trust.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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