Emerging market equities witnessed investment outflows of $107 million in the week of June 26. These equities have seen net positive flows in three out of the past five weeks.
Currently, emerging market equities are trading at 12.68x on a one-year forward earnings basis. Valuations rose by 0.83% in the week ending June 26.
Interest in US equities has slowed due to expectations that interest rates will rise because of the overall nominal growth of corporations. Investors believe the EU will outperform US equities for the next two to three years.
Emerging market equities (EEM) advanced by 0.62% in the week ending June 26, 2015. They were pressured mainly by heavy selling of Chinese stocks, but partially offset by strong buying of Indian and Brazilian…
The EU’s recovery from the 2007 crisis has been slower than the recoveries in the US and emerging markets.
EU equities outperformed other major markets in 2015 thanks to the quantitative easing measures announced by the European Central Bank, a weaker currency, and rising exports.
In the week of June 26, US equities witnessed net investment outflows for the 14th straight week. The week’s total outflow stood at $3.0 billion—higher than the previous week’s $2.2 billion.
With the announcement of reforms by major emerging economies and quantitative easing by the European Central Bank, investors are betting big on equities outside the US, especially on emerging markets.
The US market fell by 0.40% during the week ending June 26. The decline was mainly due to contraction of the US economy in 1Q15, lowering manufacturing activity.
Emerging market equities witnessed investment flows of $100 million in the week ending June 19, 2015. These equities have seen net positive flows in three out of the past five weeks.
Asset managers that could benefit from the strong performance of emerging market equities include BlackRock (BLK), Fidelity Investments, and Franklin Resources (BEN), among others.
In the past, major emerging market equities including China and India have risen as a result of reforms intended to help growth.
European Union equities outperformed other major markets in 2015 thanks to the quantitative easing measures announced by the ECB, a weaker currency, and rising exports.
European Union equity market valuations fell by 0.97% last week, mainly due to Greece’s debt woes. The Greek government didn’t appear closer to finding a solution.
Major ETFs are attracting investments. These include the iShares MSCI EAFE ETF (EFA), the iShares MSCI EMU ETF (EZU), the Vanguard FTSE Europe ETF (VGK), among others.
In the week ending June 19, US equities (SPY) witnessed net investment outflows for the 13th straight week. The total outflow during the week stood at $2.2 billion.
Currently, US equities (SPY) are trading at 17.8x on a one-year forward earnings basis. Valuations rose by 0.97% in the week ending June 19, 2015.
US equities rose last week on flat inflation, a rise in leading economic indicators, and the expectation that interest rates will rise but only slowly.
After a robust 2014, consumer loan growth has been declining since the beginning of 2015. With a rising yield curve, growth is expected to deteriorate more.
Residential real estate loans declined by 0.4% in April on a seasonally adjusted annualized basis. They increased by a meager 0.3% in May 2015.