EEM, the emerging market ETF, has suffered a two-day slide in the wake of President Barack Obama’s election victory. Investors are worried about the U.S. fiscal cliff and the lingering European debt crisis.
Still, Obama’s re-election can support emerging market stocks on prospects he is more likely than challenger Mitt Romney to maintain asset purchases designed to bolster the U.S. economy, said Michael Ganske, head of emerging market research at Commerzbank, in a separate Bloomberg report.
“A clear-cut win for Obama is good news,” Ganske told Bloomberg. “The political agenda of Romney had some question marks, such as naming China a currency manipulator and the continuation of QE3.”
iShares MSCI Emerging Markets
Full disclosure: Tom Lydon’s clients own EEM and SPY.