Small, but Noticeable Divergence Opening Up Between EM and DM
We certainly haven’t been shy about identifying the rout in EM stocks and the very emotional selloff that took place in August. At the time we showed that the emotion at the August low was commensurate with the 2011 and 2008-2009 panics, both of which happened to be good buy spots for EM stocks.
Given that backdrop, we find it interesting that over the last few days as developed market stocks have plunged new lows the emerging market stocks have actually held (so far) their August lows. Why is this important? It could be an additional sign that the worst is behind us for rout in EM stocks.