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The Three Culprits Behind The Emerging Markets Selloff. LO
"(1) a resurgence of fears over a hard landing in [China], the world's second largest economy (2) Argentina's decision to abandon its policy of intervening in the foreign exchange market (3) ongoing concerns over the Federal Reserve tapering its quantitative easing program" and (4) a sort of contagion effect, "Investors buy emerging markets ETFs; they don't buy specific stocks in the Philippines or Argentina. So if they decide to take fright at what's happening in one or two of the big countries, they sell everything," said Jim Walker, founder and managing director of Asianomics.
Reply to @David_Snowball: Correct - but rhetorically I don't care for the number "4." Just doesn't sound symmetrical for some reason. 3 works much better. 10 also works very well and suspect by next week somebody will come up with 10 reasons to sell EM funds.
Reply to @cman: Exactly. I also agree with David's list above, and think #4 definitely plays a part. Investors seem to have very little interest in individual EM stocks - I'd say in the US, investment in EM is probably done 90-95% via funds.
Comments
"(1) a resurgence of fears over a hard landing in [China], the world's second largest economy
(2) Argentina's decision to abandon its policy of intervening in the foreign exchange market
(3) ongoing concerns over the Federal Reserve tapering its quantitative easing program"
and
(4) a sort of contagion effect, "Investors buy emerging markets ETFs; they don't buy specific stocks in the Philippines or Argentina. So if they decide to take fright at what's happening in one or two of the big countries, they sell everything," said Jim Walker, founder and managing director of Asianomics.
David
youtube.com/watch?v=qWsByaAFBGo&list=PLqQNt9DP_BNCmTDhvVA-oQrmXS0ys5GnM&feature=c4-overview-vl
Regards,
Ted
Regards,
Ted