EDD - Chart Storm: EM Can Get A Lot Worse Before U.S. Stocks Flinch
Drivers Behind EM / US Stock Divergence are No Joke
- US stocks seem at little risk of contagion from EM counterparts in the short term.
- Evidence suggests that the divergence is far from coming to a head in EM FX and stock issues.
- Domestically, US stocks are likely daring the Fed to tighten past September given the EM situation.
The USD strength caused by various factors is dragging the EM indices into the ground for a simple reason. Those countries dependent on trade and high velocity of money to pay their USD-based debts are suffering