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Brazil, China and Emerging Market Turmoil Poses Broader Trouble

Brazil, China and Emerging Market Turmoil Poses Broader Trouble

John Kicklighter, Chief Strategist

Talking Points:

  • Brazil's impeachment headlines are adding greater uncertainty to an already-troubling economic situation
  • The BRICS group accounts for an estimated 25-30% of global GDP, which makes the underpriced risk a global concern
  • Market exposure and volatility measures for the BRIC/Emerging Market are far lower than their true risks threaten

Having trouble trading in the FX markets? This may be why.

The headlines out of the BRICS and Emerging Market group is growing increasingly stormy again. Brazil's political trouble, China's financial risks and Russia's economic strain with sanctions are not just concerns for those with direct exposure to those countries' assets. These emerging market and 'BRICS' members represent a very important piece to a healthy global system. And, they are slowly turning into a greater risk than boon. From the BRICS and Emerging Market ETFs, we see a more responsive 'risk' response over the past years and in the most recent slip from this past week. Yet, from this troubled group carrying more than its fair share of the world's future and facing a stream of unfavorable news; we also see the telltale sign of complacency and misplaced speculative certitude. What trouble spots should we keep track of and what does Emerging Market trouble mean for the global financial system? That is the focus in today's Strategy Video.

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