What Are the Five Keys to the Emerging Market Outlook?

LPL Research says, “We continue to prefer emerging market (EM) equities in tactical asset allocations.

EM equities have given back strong early-year gains, pushing the MSCI EM Index into negative territory year to date on a total return basis. Many headwinds have weighed on EM stocks, including rising interest rates, U.S. dollar strength (and related weakness in EM currencies), and trade war fears. Here we highlight five keys to our EM outlook.”

Key takeaways include:

  • We favor emerging market and U.S. equities for tactical asset allocations based primarily on our outlooks for global economic growth and earnings.
  • We expect strong economic growth to help EM offset tighter monetary policy and potentially higher interest rates in 2018.
  • Other keys to the EM outlook include the U.S. dollar, earnings, and trade policy

To read the complete insights from John Lynch, Chief Investment Strategist, and Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial, click here.