We are Liking 2 out of 3 “Panic Areas” at Current Levels
Stock markets are very cyclical, as human emotion swings between “Fear & Greed” and the 3 markets discussed below are clearly experiencing the fear factor. The fear of China only growing at 7% (what most countries dream), has recently devastated emerging markets, sending the MSCI Emerging Market Index to a 4-year low. There is no doubt that with Australia’s reliance on commodities, some of this selling has hit the local market. – see chart 1. We believe if China can maintain ~7% controlled growth over coming years it will be extremely happy, the problem is a number of countries showed no foresight and thought it would be much higher for longer. The price fluctuations of Iron Ore, so important to Australia, sums it up: (VIEW LINK)
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