Bloomberg Intelligence's 'Equity Market Minute' 9/04/2019

The video discusses the persistent valuation discount of emerging market stocks compared to developed markets, noting that this discount has not been a catalyst for reversing underperformance. Despite a slight reduction in the discount since 2015, emerging markets continue to lag behind due to weaker fundamentals and margins. The video highlights that US growth is expected to outpace emerging markets, maintaining the valuation gap. The analysis includes graphical representations of valuation gaps and margin differences, concluding with a cautious outlook for emerging markets.

What is the current valuation gap between emerging market stocks and developed market equities?

• Emerging market stocks are trading at a 22% discount.

• Emerging market stocks are trading at a 10% discount.

• Emerging market stocks are trading at a 5% discount.

• Emerging market stocks are trading at a 30% discount.

What was the maximum recorded discount for emerging market shares compared to developed market shares in 2015?

• 35%

• 25%

• 20%

• 30%

Why has the valuation discount not been a catalyst for improving emerging market performance?

• Because the discount is not recognized by investors.

• Because developed markets have also been underperforming.

• Because the discount is too small to make a difference.

• Because emerging markets have continued to underperform despite the discount.

How do emerging market margins compare to US margins over the last five years?

• Emerging market margins have fallen short of US margins by 50 basis points.

• Emerging market margins have fallen short of US margins by 28 basis points.

• Emerging market margins have been equal to US margins.

• Emerging market margins have surpassed US margins.

What is the expected trend for US growth compared to emerging market growth in the year ahead?

• US growth is expected to decline while emerging market growth increases.

• US growth is expected to surpass emerging market growth.

• US growth is expected to match emerging market growth.

• US growth is expected to lag behind emerging market growth.