“Brazil epitomizes the region’s hard times — it has greatly increased its exports and dependence on China over the past decade. While its economy is more diverse than others, Brazil still relies heavily on commodities,” reports CNN Money.
In what would be good news for wary emerging markets investors, developing world stocks may be nearing a capitulation point and some marquee banks are taking bullish views of this downtrodden asset class.
Some fund managers believe it will be a while before emerging markets stocks recover in earnest. Investors pulled out of riskier emerging markets as data showed growth from China’s economy slowed, commodity prices fell and the Federal Reserve signaled an interest rate hike this year. The China slowdown is fueling the lower commodity prices and lower outlook for other major emerging economies. Moreover, rising borrowing costs, a stronger dollar and rising corporate debt loads, with the International Monetary Fund warning of corporate defaults, are adding to volatility. [Area Emerging Market ETF Investors Must Monitor]
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