Emerging-Market Stocks Suffer Double Whammy: EM Insight

The video discusses the challenges faced by emerging markets, which have underperformed compared to developed markets. Despite this, their valuations have increased, indicating rising risks rather than opportunities. A key issue is the decline in corporate earnings across emerging markets, exacerbated by the trade war, particularly affecting Chinese companies. Analysts have also lowered earnings estimates, further impacting market recovery.

What has been the performance of emerging market stocks compared to developed markets in the last 12 months?

• They have performed equally with developed markets.

• They have outperformed developed markets by about 10 percentage points.

• They have outperformed developed markets.

• They have underperformed developed markets by about 10 percentage points.

What is the main reason for the increase in PE ratios in emerging markets?

• Stable earnings

• Increasing market share

• Falling earnings

• Rising profits

What has been the trend in corporate performance across emerging markets in the last three quarters?

• It has improved significantly.

• It has remained stable.

• It has collapsed.

• It has shown slight growth.

Which country is a significant factor in the downward revisions of earnings estimates for emerging markets?

• Brazil

• Russia

• China

• India

What is the primary cause of the falling earnings estimates in emerging markets?

• Increased consumer spending

• Improved global relations

• Trade war and tariff threats

• Technological advancements