The End of the Emerging-Market Party
Enthusiasm for emerging markets is evaporating, as their stocks and bonds are down for the year and their economies are slowing. And, with stable or lower export prices reducing real growth and causing their currencies to weaken in real terms, the buoyant performance of the recent past is unlikely to return any time soon.
CAMBRIDGE – Enthusiasm for emerging markets has been evaporating this year, and not just because of the US Federal Reserve’s planned cuts in its large-scale asset purchases. Emerging-market stocks and bonds are down for the year and their economic growth is slowing. To see why, it is useful to understand how we got here.