Valuation Caution Returns as Emerging Markets Face 2021 Reality
- ING is constructive on the market, with dovish central banks
- NYSE delisting of Chinese companies to keep traders on toes
This article is for subscribers only.
Rarely, if ever, can a year have started with price levels in emerging markets looking so divorced from the fundamental backdrop.
Rising Covid-19 case numbers and uneven rates of recovery in the biggest of the developing economies underscore a nagging concern that this will be about as good as it gets for stocks, bonds and currencies. Currencies surged to a record earlier on Monday as the dollar slid. The relative strength index on MSCI Inc’s emerging-market equities gauge is above 70, suggesting the market is in overbought territory. The average yield on local-currency debt is less than 20 basis points above the all-time low of 3.46% reached in May.