Weekend news from the emerging world painted a mixed picture for
growth. Here are a few points of interest:
September new yuan loans in China rose CNY 787 bln [cny650 bln
forecast], while September CPI rose 3.1% y/y [2.9% expected]. Food
prices, lifted by weather, contributed to the strength in CPI.
Lending is firm and inflation is still below the 3.5% target.
Chinese September exports contracted 0.3% y/y [8.1% expected] and
imports expanded 7.4%y/y [9.6% forecast]. Trade activity is
Chinese September auto and light truck sales surged 21% y/y to
1.59 mlu. This was the highest volume level since January's
gain of 1.73 mlu. The Association of Automobile Manufactures
believes that more than 20 mlu will be sold this year.
PWRSH-SP EMHBP (EEHB): ETF Research Reports
ISHARS-EMG MKT (EEM): ETF Research Reports
PWRSH-DWA EM MK (PIE): ETF Research Reports
VANGD-FTSE EM (VWO): ETF Research Reports
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Looking to India, September WPI rose 6.46% y/y [6.0% expected] and
September CPI expanded 9.84% y/y [9.6% forecast]. WPI
has climbed from a recent trough near 4.58%. Inflation is sticky in
India and the economy remains stuck in a high inflation/low growth
The Russian central bank kept interest rates unchanged. In the
press release, it made the following statement: "
The dynamics of the key macroeconomic indicators suggested that
the pace of economic growth remained low. Production activity and
investment demand remained subdued. Producer confidence indicators
continued to deteriorate. At the same time the unemployment rate
stayed at the relatively low level. Consumer demand supported by
the real wage and retail lending growth remained the major driver
for the economic growth. Nevertheless, given subdued investment
activity and sluggish recovery of external demand, the Bank of
Russia expects economic growth rate to remain low in the medium
As an indicator of EM stock market pricing, the MSCI Emerging
Markets ETF (EEM) continues its two year range between the mid
$30's and mid $40's. Although it is near the upper end
of the range, there are few signs of a breakout.
What is your view on EM investing into
? Pick your return profile:
1) A loss of more than of 2.5%
2) A loss between 0% and 2.5%
3) A gain greater than 0% but less than or equal to 2.5%
4) A gain greater than 2.5%
5) Pick your own return - put a number on it
Let me know your thoughts below: