Brazil stocks up on government asset-sale plan

Brazillian stocks rose with a massive sale of state assets on Thursday. It is believed this is a government-run attempt to rein in public debt growth and cut a widening budget gap. However, with President Michel Temer seeking to reduce state involvement in the economy, it becomes a question of who will win out. 

Brazil's benchmark Bovespa stock index rose 1 percent to a new-six year high with shares of Eletrobras, the power utility, as one of the biggest gainers. Optimism infiltrated wallets as a decision by the lower house of Congress to approve the main text of a bill creating a new market-based lending benchmark for state development bank BNDES that would considerably reduce discretionary subsidies.

"Coupled with well-behaved inflation, this sets the stage for the central bank to cut interest rates even more," analysts at the Magliano brokerage wrote in a client note.

Read more at Reuters.

How Emerging Markets And Blockchain Can Bring An End To Poverty

Can blockchain and cryptocurrencies become the technology that truly levels the playing field for humanity and help continue the reduction of poverty? Yes. 

Financial inclusion is considered a key factor to poverty reduction. It gives people access to a formal financial system.  With over 2 million unbanked, mobile options can provide a more convenient choice. 

 Blockchain startup Everex, which launched its ICO recently and already raised over 6 million USD (Roughly 27,000 Ethereum), considers financial inclusion as part of its mission.

“The lesson learned from the previous decade, however, is that the real needs of the world’s unbanked population comprise inclusion, empowerment and easy access to the same financial instruments that allow industrial nations to provide their denizens with the social mobility they enjoy,” a recent Everex blog post said.

Read more at Forbes.

Stick With Emerging Markets To Beat U.S. Returns, Goldman Says

Goldman Sachs Asset Management (GSAM) expects emerging markets to outperform developed markets even if the future is cloudy or bumpy. 

There is a risk that rising interest rates will slow global economies, but this is especially true for the United States. If rates rise more quickly than expected, things could be worse still.

GSAM presumes U.S. inflation will rise slowly with higher interest rates from the U.S. Federal Reserve. The consumer will likely be able to handle this, GSAM predicts, with U.S. real wage growth "at its highest since the 1950s, in recent years." 

Still, the emerging markets bounce is a promising signal of prolonged outperformance.

Read more at Barron's.

U.S. Asset Managers Under-allocated to Emerging Markets Despite Outperformance

U.S. stock investors pumped fresh funds into emerging markets after recent outperformance. However, they remain under-allocated by a key measure, as a combination of "home bias" and lingering concern about volatility have restrained client interest.

In 2017, they increased allocation by a near $52 billion in the first quarter. U.S. domiciled active managers have just 5 percent of assets under management allocated to emerging market equities, according to research data from eVestment. 

With global economic growth trends favoring the fast-growth asset class, investors will need to move into emerging markets to continue reaching gains above 5 percent in bond and equity portfolios, said Krishna Memani, chief investment officer at OppenheimerFunds. 

"In a growth-short world, emerging markets are going to be the primary source of growth for the forseeable future," Memani said. "That is decades." 

Read more at Reuters.