Emerging Markets Strategy Feb 2018: Volatility Returns, Fundamentals Stay Strong (JP Morgan)
- The combination of broadening economic growth and contained inflation is driving strong earnings gains. In 2017, profit growth was the major source of total return for emerging market (EM) equities, which are still approaching only the middle of their performance cycle.
- We expect disinflationary slack will disappear from most of the developed world in 2018, so any acceleration in economic growth from this point could present late-cycle complications.
- Despite extended outperformance by EM information technology stocks, we do not see a bubble in the making. Earnings have fueled the gains, and multiples for the sector remain well within normal ranges.
- Although U.S. valuations do appear a little heady, EM valuations are well below their long-term average, even after the multiple expansion of recent years.
- 2018 Emerging Markets Outlook: The Next Leg of the Recovery (Mirae Asset)
- Look at Stock Returns Rather Than GDP Growth Figures (II)
- Vietnamese Verses Chinese Retail Investors (AFC)
- OMGI’s Crabb: India Consumer Stocks on “Very Stretched Multiples” (FE Trustnet)
- Morgan Stanley’s Shallett: Emerging Markets Beset By Risk & Rich Valuations (Citywire)
- Are Emerging Markets Recoupling with Developed Markets? (II)
- Where to Find Opportunities in Emerging Markets (BlackRock)
- Deutsche Bank: Emerging Market Rally is a False Dawn (Barron’s)
- Argentina: Where Growth & Stock Market Returns Diverge (Mobius Blog)
- Fidelity China Special Sits Trust: Four China Investment Themes (FE Trustnet)