EM vs DM Kisses Lows
EM vs DM: Emerging Markets yesterday kissed their lows again the SPX going back through the crisis, even including a spike down when EM "bottomed" first in the Fall of 2008. Here are some components of the malaise and some views that now prevail:
- Hungary ( HUF , quote ) and Poland (PLN , quote ) may have currencies that are overvalued and could come under more pressure
- Fed Tapering is clearly a root of this round of EM stress and will continue unabated until it is proven that EM weakness is weighing on the US economy (or some other macro data the Fed determines is posing risks to the recovery).
- Mexico remains a bright spot