Examining the foundation of Emerging Markets

From a low in January, MSCI's Emerging Markets stock index has recently risen more than 18 per cent. So far in 2016, Brazil's real is up 11.6 per cent, Russia's ruble 10.7 per cent, and South Africa's rand 4.2 per cent.

The turnaround has been remarkable a closer look examining the stability of emerging market's foundation of growth finds three reasons:

  • The stability of China has boosted emerging market growth and commodity prices.
  • Looser financial conditions by the US Federal Reserve have raised rates and softened the dollar.
  • The previous overwhelming pessimism on emerging markets resulted in a small boost to push prices significantly higher, flipping expectations.
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Read more at the Wall Street Journal.