Falling of emerging markets continues for too long

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Falling of emerging markets continues for too long

September 06, 2018 - 10:38
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Falling of emerging markets continues for too long, Bloomberg writes. It is 222 days for stocks, 155 days for currencies and 240 days for government bonds.

Photo © Gerd Altmann, CC0 1.0

Falling of emerging markets continues for too long, Bloomberg writes. It is 222 days for stocks, 155 days for currencies and 240 days for government bonds.

Measuring scope of losses in the amount of days that went from reaching peak numbers to dropping to the lowest levels, some strategists doubt that this is just a reaction on higher US interest rates or growing trade tensions. This situation more and more reminds full-scale crisis of investors’ confidence in developing countries’ economies.

Short but intense periods of stocks selloffs usually end with short rebounds, as it was observed many times in 2016 and 2017.

Longer periods of emerging markets decline were seen in the period from 2013 to 2015, when they showed worse results than developed markets stocks amid row of shocking news including reduction of economic stimulus on behalf of UA Fed and slower growth in China. The difference is that shares rebounded for some time then.

According to expert opinion, only very brave investors will pour money into emerging markets today.