EM Fund Stock Picks & Country Commentaries (August 4, 2024)
Bear dollar case, inflation hits luxury stocks, Africa is back on the map for investors, divergence b/w global growth behemoths Taiwan & Korea, Generative AI, real asset investing case, etc.
As of early August, a number of quarterly fund updates have become available covering numerous frontier or emerging market stocks along with new research:
🔬 Peter Schiff’s Euro Pacific Asset Management has this piece: Recent Misses in the Luxury Sector: Inflation’s Growing Impact - The luxury goods sector has long been a bellwether for economic health and consumer confidence. In recent months, however, several high-profile luxury brands have reported disappointing sales and earnings, raising concerns about the broader economic implications. This article examines the recent performance misses by leading luxury brands such as LVMH Moët Hennessy Louis Vuitton (EPA: MC / OTCMKTS: LVMUY / LVMHF), Burberry (LON: BRBY / FRA: BB2 / OTCMKTS: BURBY / BBRYF), and Kering SA (EPA: KER / OTCMKTS: PPRUF), linking these outcomes to the rising tide of inflation. We argue that despite a momentary slowdown in the Consumer Price Index (CPI), inflationary pressures are likely to persist, potentially continuing to erode demand for luxury goods. Furthermore, in such an inflationary environment, investors might consider rotating into quality, value-oriented stocks and commodities to safeguard their portfolios.
🔬 Amundi Investment Management has this piece: Macroeconomics, Geopolitics, and Strategy - July/August 2023 - Macroeconomic focus, Emerging markets, Macroeconomic snapshot, Central bank watch, Geopolitics, Policy, Scenarios and risks, Amundi Institute models, Infographic - Markets in charts, Commodities & Currencies
🔬 Crescat Capital has this lengthy piece full of charts: The Bear Case For The Dollar - In our view, we stand on the cusp of a major transformation in the foreign exchange (FX) markets: a likely significant depreciation of the US dollar relative to other currencies over the next several years. Allow us to elaborate.
Invesco has these outlook type pieces:
🔬 Are emerging markets going to outshine developed markets in 2H 2024? - Emerging market (EM) central banks have arguably been relatively successful in taming the post-Covid and wartime energy shocks, in many cases stabilizing growth. As a result, we notice markets pricing a period of relatively stable policy interest rates across major developed market (DM) and EM economies, with substantial interest rate spreads that vary widely over the coming years.
🔬 How are geopolitics impacting emerging markets? - Domestic politics, geopolitical rivalry, open conflict in Europe and rising tensions in Asia are increasingly reflected in trade, industrial, climate and national security policies. These factors are already impacting financial markets in ways that we believe will differentiate emerging markets (EMs) both geographically and ideologically.
🔬 Should we be concerned about rising fiscal deficits in emerging markets? - Most major emerging markets (EMs) are running sizeable fiscal deficits regardless of GDP growth, inflation, or interest rate levels. Such conditions have often been associated with financial distress or crisis. But the specifics of funding flows for many major EMs suggest those governments should be able to avoid fiscal crisis this time.
🔬Invesco Global Sovereign Asset Management Study 2024 - Uncover the themes shaping the future of official institutions.
The following research pieces would interest investors in China: