The 10.2% unemployment figure is far worse than what economists had expected, and they don’t see any sign of relief until next year. While the pace of layoffs has slowed, the unemployment rate is continuing to climb, reports Javier C. Hernandez for The New York Times.

Unemployment isn’t just as issue here, either; millions around the world don’t expect to see relief in the form of jobs anytime soon. The European Union forecast unemployment in the eurozone to rise to 10.7% in 2010, up from 9.5% this year. Unemployment ranges from 3.5% in the Netherlands to 18.3% in Spain, reports Greg Keller for the Associated Press. In China, the official urban unemployment rate is 4.3% in the third quarter. Brazil’s unemployment was 8.1% in August, almost unchanged from the previous month.

Gold futures have soared to a record $1,100 an ounce today. While some profit-taking briefly sent gold lower, it resumed its course and analysts expect it to continue to move higher, reports Allen Sykora for The Wall Street Journal. SPDR Gold Shares (NYSEArca: GLD) is up about 0.4% year-to-date. (More on gold can be found here).

Businesses slashed inventories for a record 13th straight month in September, although sales rose for the sixth consecutive time. Many hope that improving sales figures will encourage businesses to start lifting production, although a rising jobless rate heightens fears that consumers won’t start spending anytime soon, reports Martin Crutsinger for the Associated Press. (An ETF to play holiday shopping).

The world’s largest insurer, AIG (NYSE: AIG) reported that it was profitable for the second consecutive quarter. Although things have stabilized, the company’s CEO said that earnings will remain choppy while they restructure.  SPDR KBW Insurance (NYSEArca: KIE) is up about 0.6% this morning.

G20 Finance Ministers are meeting this week to discuss financial reform and economic recovery. While these economies have put in place certain policies in order to push along a recovery, they’re not policies anyone wants to keep in place forever. The general consensus is that it’s too soon to reverse the measures, but it’s not too soon to begin talking about when and how it would happen. Government debt in developed G20 countries is likely to reach 118% of annual national income in 2014, reports Andrew Walker for the BBC.

For more stories on the global economy, visit our global ETF page.

Although the pace may eventually slow down, Barron’s reports that emerging markets still have room left to grow in the long haul. And for the time being, they may be the place to hide out as developed markets still work toward normalcy. In the near-term, growth rates in developed nations are expected to be lackluster, and much less robust than those in the developing world’s. (What you’re missing when you’re not globally invested).

Countries that are resource rich and developing are stockpiling cash and shoring up their balance sheets for a strong recovery and a growth spurt unlike any seen before. Earnings and  economic activity have been revived. Morgan Stanley feels that earnings in emerging markets have bottomed in the third quarter and they’re now set to climb again. (Why frontier markets could be even bigger).

For more stores about emerging markets, visit our emerging markets category.

There are a variety of ways to play emerging markets. There are broad funds, such as iShares MSCI Emerging Markets (NYSEArca: EEM), Vanguard Emerging Markets (NYSEArca: VWO) and iShares MSCI EAFE Index (NYSEArca: EFA).

There are funds that focus on regions, such as Claymore/BNY Mellon BRIC (NYSEArca: EEB) and BLDRSAsia 50 ADR Index (Nasdaq: ADRA).

Finally, there are single-country funds, such as iShares MSCI Brazil (NYSEArca: EWZ) and Market Vectors Vietnam (NYSEArca: VNM).

Keep in mind that the narrower you get in your exposure to emerging and frontier markets, the higher your risk will be. Be sure to have an entry and exit strategy before you invest. (How to follow trends).

Brazil is one step closer to joining the ranks of developed nations: its middle class is growing. For a country long divided between a small, wealthy elite and a vast army of have-nots, it’s a positive development that many believed was a long shot just a few years ago. (An investment upgrade by Moodys is also proof of the stable economy).

Alibaba reports that the true definition of a middle class is hard to define. Brazil uses a five-tier system to classify population by money. The middle tier, called Class C, comprises those with household income between 1,115 and 4,807 reals per month ($641 to $2,763). (What Brazil’s foreign investment tax means). This segment has ballooned to more than half the country’s total population.

The benefits of Brazil’s bigger middle class include:

• Programs have lifted 19 million people out of poverty and into this class
• They’re grabbing status symbols such as televisions and cars; new car sales jumped 20% in September
• The middle class can press for social change, improved schools and stronger political institutions
• They put a higher premium on citizens’ rights, such as multi-party elections and free speech

Mina Kimes for CNN Money reports that unemployment is down from its March peak, wages are up, and the Bovespa index, which tracks the country’s biggest stocks, has climbed 77% so far this year.  (Seven things to like about Brazil).

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 92.6% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 64.5% since May inception

Assets: $289.9 million

Holdings: Small-cap companies domiciled  and primarily listed on an exchange in Brazil, or companies that generate at least 50% of their revenues in Brazil.

Objective: Tracks the Market Vectors Brazil Small-Cap Index.

What’s Good

• This fund gives exposure to the small-caps of Brazil; small-caps tend to outperform large-caps in periods of recovery, because their small size makes them more nimble.
• Weighted 30% in consumer discretionary, 17.3% in industrials, 16.7% in financials, 12.3% in materials.
• 56 securities make up the index.
• The expense ratio is 0.73%.

The Latest News

• Brazil recently instituted a 2% tax on foreign investment in equities and fixed income (What it could mean).

• With the right mix of policies, Brazil could sustain average annual economic growth of 5% over the next 10 years, according to Goldman Sachs.
• Brazil’s president is being credited with the country’s growth. He has built a foundation of low inflation and sound fiscal policy that has released a tide of investment in Brazil. (Our definitive guide to the BRICs).
• Around mid-2010, Jubak says, the carry trade could begin to unwind and lead investors to pull money out of assets that are currently in favor. But for now, Brazil’s small-caps are benefiting from the carry trade.
• Credit is back to normal levels and the economy is back on stable ground, reports Michael S. Derby for The Wall Street Journal. Brazil’s central bank claims the growth is sustainable, as well.
• The economy has added jobs to payroll and government data indicates companies are hiring workers to meet growing demand for manufactured goods and new homes, reports Isabel Versiani for Reuters.
• Retail sales are up for the fourth month in a row. Sales rose 4.7% in August from a year ago, report Joshua Goodman and Adriana Brasileiro for Bloomberg. Domestic demand indicates that continued economic support will continue.
• In 2010, Brazil’s economy is expected to grow 4.4%; this year, growth is expected to be around 0.12%. (How to play Rio’s Olympic win).

Turkey. Turkey is rapidly developing and there’s no indication that the economy needs aid from the International Monetary Fund (IMF). Growth in the economy could likely accelerate in 2011 after a return to growth in 2010. Turkey’s market index has been driven up by the banking sector, which makes up around 40% of the market. Bank earnings have been bolstered by a series of rate cuts that have reduced interest on customers’ deposits as lending rates remain high. (Does Turkey need more support?)

• iShares MSCI Turkey Invest Mkt Index (NYSEArca: TUR): up 179% since low; up 101.6% year-to-date

Russia. Next year’s growth could top 2% if oil prices stay high. Greater revenues from taxes on energy companies could also ensure this year’s budget deficit is smaller than expected. Economists believe Russia’s GDP growth may gain a foothold as soon as the fourth quarter because of fiscal stimulus. Additionally, the economy will pick up speed once oil prices increase and world economies recover. The Russian economy is dominated by resources and banking. (Russia’s potential stumbling blocks).

• Market Vectors Russia (NYSEArca: RSX): up 161% since low; up 139.5% year-to-date

Brazil. Brazil could sustain average annual economic growth of 5% over the next 10 years. Low inflation and sound fiscal policy have released a tide of investment in Brazil. For now, Brazil’s small-caps are benefiting from the carry trade. Companies are hiring workers to meet growing demand for manufactured goods and new homes. In 2010, Brazil’s economy is expected to grow 4.4%; this year, growth is expected to be around 0.12%. (Seven things to like about Brazil).

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 125% since low; up 114% year-to-date

India. The Indian Prime Minister’s Economic Advisory Council expects the GDP to expand 6.5% to 6.75% in 2009-10, despite a potential decline in agricultural output. Inflationary concerns may be met by tighter monetary and fiscal policies in the coming months. Factors such as capital flows, domestic demand, portfolio flows and a strong savings rate have India in a good position to continue moving forward. (Why India could strengthen).

• WisdomTree India Earnings (NYSEArca: EPI): up 138% since low; up 88.2% year-to-date

Indonesia. A young population and a falling birth rate equate to a surge in the ratio of working population to the number of dependents. Circumspect fiscal policy has left the government with enough cash for infrastructure and public services. Indonesia may enjoy a period of political stability and does not rely too heavily on exports. Declining interest rates have helped boost consumption, which is around 60% of GDP. (Five points in Indonesia’s favor).

• Market Vectors Indonesia ETF (NYSEArca: IDX): up 180% since the low; up 155.6% since Jan. 20 inception

Max Chen contributed to this article.

To understand the implications of the new tax, it’s important to understand how iShares MSCI Brazil (NYSEArca: EWZ) works.

EWZ is a “cash create” product, unlike most ETFs where delivery is taken in the form of securities. Regulations in Brazil don’t allow in-kind share creations. Cash is taken in lieu of actual shares, and the money is taken and invested in Brazil.

When a market participant (MP) wants to create more shares of EWZ, there’s a fee associated with this creation that’s already built in. This new tax may eventually become a part of the fund expenses in the event that an increase in demand for EWZ leads to the creation of more shares.

According to its prospectus, Market Vectors Brazil Small-Cap (NYSEArca: BRF) also issues and redeems creation units primarily for cash.

Anything already issued in any fund is not impacted because it’s already in the local currency.

Meanwhile, money is flooding into Brazil. About $31 billion in foreign direct investment is expected this year. In turn, this news has upped their stock market and increased the value of the currency. The risk Brazil runs is the real getting too strong, which is a new problem for a country that has usually had to deal with inflation, reports Carl Mortished for Times Online.

This is what led to the tax: the country feared losing its foreign customers and exporters raised a ruckus, hence the 2% tax. While investors and the International Monetary Fund (IMF) initially balked, for the most part investors seem to feel the positives of growth prospects in Brazil outweigh the negatives of the tax.

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 116.3% year-to-date

• Market Vectors Brazil Small-Cap (NYSEArca: BRF): up 86.7% year-to-date

• WisdomTree Dreyfus Brazilian Real (NYSEArca: BZF): up 34% year-to-date

Fundamentals in favor of Brazil continue to improve while surprising and delighting investors. The future looks bright for the economy, especially if these numbers keep trending in the right direction. Jim Jubak for The Money Show lists some reasons why Brazil is a hot spot for investors, and we tossed in a few others, too:

• With the right mix of policies, Brazil could sustain average annual economic growth of 5% over the next 10 years, according to Goldman Sachs.
• Brazil’s president is being credited with the country’s growth. He has built a foundation of low inflation and sound fiscal policy that has released a tide of investment in Brazil. (Our definitive guide to the BRICs).
• Around mid-2010, Jubak says, the carry trade could begin to unwind and lead investors to pull money out of assets that are currently in favor. But for now, Brazil’s small-caps are benefiting from the carry trade.
• Credit is back to normal levels and the economy is back on stable ground, reports Michael S. Derby for The Wall Street Journal. Brazil’s central bank claims the growth is sustainable, as well.
• The economy has added jobs to payroll and government data indicates companies are hiring workers to meet growing demand for manufactured goods and new homes, reports Isabel Versiani for Reuters.
• Retail sales are up for the fourth month in a row. Sales rose 4.7% in August from a year ago, report Joshua Goodman and Adriana Brasileiro for Bloomberg. Domestic demand indicates that continued economic support will continue.
• In 2010, Brazil’s economy is expected to grow 4.4%; this year, growth is expected to be around 0.12%. (How to play Rio’s Olympic win).

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil (NYSEArca: EWZ): up 117% year-to-date

• Market Vectors Brazil Small Cap (BRF): up 86.7% since inception

What’s different this time is that corporations aren’t looking abroad to growing nations such as China, Brazil and India to cut costs, but instead to drive revenues, reports The Los Angeles Times.

• Companies have been global for some years now, but a trend of focusing on international consumers is emerging as economies become increasingly middle class.
• The size of emerging markets dwarfs the domestic markets of most developed nations. China, India and Brazil have a combined population of more than 2.6 billion people, many of them young and increasingly affluent, in contrast to the aging and far smaller populations of Western Europe, Japan and the United States, making them even more attractive. (Learn more about the BRIC economies here).
• Not only will this trend help drive profits, but some believe that it could be a source of new investment and jobs in the United States.

On the downside, this new trend could rekindle politically sensitive issues of earlier years, including outsourcing, U.S. tax and currency policies and other incentives that are tied to overseas investments and the repatriation of profits.

From an investor’s perspective,  some ETFs that could benefit are those that hold companies which do a lot of business overseas, including companies in the food, semiconductor and industrial sectors.

• PowerShares Dynamic Food & Beverage (NYSEArca: PBJ): up 8.2% year-to-date

• SPDR S&P Semiconductor (NYSEArca: XSD): up 66.2% year-to-date

• Vanguard Industrials ETF (NYSEArca: VIS): up 15.7% year-to-date

For more stories on emerging markets, visit our emerging markets category.

Kevin Grewal contributed to this article.

Taking advantage of a recent sovereign debt upgrade, Brazil will raise about $1 billion in issuing global bonds that mature in January 2041 at a price guidance of 5.85%, write Rogerio Jelmayer and Claudia Assis for NASDAQ. Brazil’s investment-grade rating has allowed the country to issue bonds with longer maturities and lower debt service costs. (Read more about sovereign debt here).

Demand for Brazilian debt is strong and some participants except the Brazilian Treasury to increase volume up to $1.5 billion. Brazilian companies and banks raised around $3.65 billion from overseas bonds.

• PowerShares Emerging Markets Sovereign Debt (NYSEArca: PCY): up 37.5% year-to-date; Brazil is 4.3%

Brazil pledged its support to the International Monetary Fund (IMF) as a world emergency lender, reports Antonio Rodriguez for AFP. Brazilian Finance Minister Guido Mantega stated the government will spend $10 billion in IMF bonds to augment the fund’s resources.

The IMF projects Brazil’s economy will contract 0.7% this year and grow 3.5% next year. (More information on Brazil’s performance this year can be found here).

Emerging market economies are seen as leading the current global recovery. These countries are growing more influential through the Group of 20 (G20) and potentially gaining more voting rights in the IMF and World Bank.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 100.8% year-to-date

For more information on Brazil, visit our Brazil category.

Max Chen contributed to this article.