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Trading the Globe: emerging markets to the rescue (EWZ, OGZPY)

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Traders have spent most of this week applauding the coordinated move of the G-7 central banks, but emerging markets are providing plenty of fuel themselves. BRIC stimulus was on the menu in this week's Trading the Globe on CNBC.

Everybody knows about China relaxing their reserve ratio requirements for the first time since the 2008 credit crunch.

This demonstrates that China's manufacturing-driven economy was indeed weaker than many suspected. But now that the BRICs are easing, it will be very good for global risk assets.

India has been liberalizing their retail sector , which has potentially vast implications for their entire consumer economy.

Brazil just eliminated a tax on foreign investment that has been a bone of contention for global traders wondering whether it was time to get back into that battered market.

And even Russia is doing their part with state-dominated Gazprom's ( OGZPY , quote ) dividend announcement .

So how do you trade it? Country by country, making an allocation to Brazil ( EWZ , quote ) at this point makes as much sense as anything else.

From a fund flows perspective, $8 billion have fled Brazil, so unlike a lot of times, people have a chance to buy at the bottom of the flows instead of at the top.

As it is, Brazil is now at 9.2 times earnings and a 40% discount to the five-year average P/E. The country is cheap after grinding for 18 months.

With the currency finally in a weaker place and a government that is comfortable with that, Brazil is poised to take off.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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