China Rate Cut Lifts Emerging Markets

Most emerging-market stocks rose as China’s surprise interest-rate cut added momentum to a four-week rally in riskier assets. The zloty weakened and Polish banking stocks fell after the opposition party looked poised for an election victory.  The Shanghai Composite Index climbed 0.5 percent in the first trading day after China lowered borrowing costs for the sixth time in a year and reduced lenders’ reserve requirements. 

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A Good Acronym for Emerging Markets Needs a V

Rarely has there ever been an acronym more fortunate than the BRIC group. Starting in 2001, when Jim O'Neil from Goldman Sachs synthesized Brazil, Russia, India and China, followed later by South Africa, the term began appearing in economics publications and everyday language. Soon it became synonymous with emerging markets, a relentlessly growing web that threatened to undermine the industrial world's primacy.

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Will Last Week's Relief Rally In Emerging Markets Last?

Stocks in emerging markets posted their best weekly gain in nearly four years last week. Analysts are divided over whether this is a dead-cat bounce or the start of an enduring mean-reversion trade in the wake of nearly non-stop declines since last April. From the perspective of the week just passed, however, there's no doubt that equity markets in so-called emerging countries enjoyed a powerful rally for the five days of trading through Oct. 9.

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New Emerging-Market Woes

One of the last havens in emerging markets is showing signs of strain.  Companies in emerging markets issued trillions of dollars of foreign-currency bonds during the decade long commodity boom, and took advantage of low interest rates in the developed world following the 2008 financial crisis. Now, many investors fear the commodity bust will lead to a rise in defaults that could deepen economic slumps in many of these nations.  Until a few months ago, emerging-market corporate bonds were regarded as a haven amid the routs that had hit stocks and currencies in many developing countries because the bonds are typically issued in the U.S. dollar and by companies with robust growth and credit profiles.

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