February 2016

[admin]

Maybe we worry too much and the stock exchange always has to climb a wall of worry, but the situation in many emerging markets really is worrying, see the whole report:

High government ownership in key sectors such as oil and gas, and financials will likely keep EM corporate credit from weakening as dramatically as that seen in US HY near term. 2. However, weak earnings, negative credit impulse, and tightening primary markets will likely hit EM corporates with a lag. Corporate fundamentals will hurt the sovereign that is backstopping them just as the sovereign’s fiscal credentials are already being questioned, leading to higher spreads and higher local yields. This should mean that the problems of one sector infect the broader economy in EM much more than it has in the US.

Path to emerging-markets meltdown - Business Insider