In regards to the inflation risk and subsequent Treasury yield rates, DataTrek Research Co-founder Nicholas Colas stated that he has “never seen a stronger consensus” surrounding any macroeconomic issue in his career.
In regards to the inflation risk and subsequent Treasury yield rates, DataTrek Research Co-founder Nicholas Colas stated that he has “never seen a stronger consensus” surrounding any macroeconomic issue in his career.
Rising interest rates this winter spooked EM stocks, which still significantly lag behind others.
Things are looking up for emerging markets (EM) and their stocks, after a brief spate of pessimism due to rising Treasury yields this winter. Lazard Asset Management thinks that faster overall global growth, modestly rising interest rates, and a rebound in commodities prices will keep their recovery on track.
“Our outlook for emerging markets equities overall remains positive in anticipation of a stronger rebound in global growth over 2021,” the firm’s analysts wrote in a research report.
But there are headwinds to overcome. Optimism about heady US economic growth this year has drawn capital out of emerging markets, forcing some developing countries like Brazil to raise interest rates despite lingering economic weakness.