Why the Emerging-Market Trade Will Grind Higher

The video discusses the current 'Goldilocks' economic conditions, characterized by good growth and moderate monetary policy. It highlights the performance of emerging markets, driven by a weak dollar and China's economic stability. The discussion also covers geopolitical risks, such as US-Iran tensions and North Korea, and their potential impact on markets. Despite these risks, markets often fail to price them until they materialize. South Korea's market performance amidst tensions is noted as a significant observation.

What are the two main factors contributing to the outperformance of emerging markets?

• Strong dollar and US economic growth

• Weak dollar and China's economic stability

• High inflation and tight monetary policies

• European Union's economic policies

What could potentially disrupt the positive trend in emerging markets?

• Rising oil prices

• European Union's economic slowdown

• Increased US interest rates

• A financial event in China

Why do markets struggle to price in geopolitical risks?

• They are always overestimated

• They are always resolved quickly

• They are unpredictable until they occur

• They are irrelevant to market performance

How has the South Korean market performed despite geopolitical tensions?

• It has outperformed emerging markets

• It has underperformed compared to global markets

• It has remained stable

• It has declined significantly

What is the significance of the South Korean market's performance in the context of geopolitical tensions?

• It demonstrates resilience despite tensions

• It indicates complacency in global markets

• It shows that markets are good at pricing risks

• It highlights the impact of US policies