JPMorgan says emerging markets are 'under owned,' stocks could rally as much as 20%
SINGAPORE — JPMorgan says stocks in emerging markets may rise as much 20% in 2021 after being largely ignored by investors this year. "I think emerging markets are very under owned as we see in the markets rally," Joyce Chang, chair of global research at JPMorgan, told CNBC's "Street Signs Asia" on Thursday. Besides China and India, many other emerging markets have been shunned by investors in 2020 as they largely flocked toward safety. Historically, investors have had about 9% allocated overall to emerging market stocks, she explained. "I think there's scope for catch-up in 2021 for emerging markets," she said.
cnbc.comEmerging markets could break to all-time highs if the dollar breaches this level, Miller Tabak strategist says
Emerging markets have rallied this year, even keeping pace with the S&P 500 since the March low. From that March 23 bottom, the EEM emerging markets ETF and S&P 500 have rebounded more than 63%. The group's next move depends on the U.S. dollar, according to Matt Maley, chief market strategist at Miller Tabak. A weaker dollar is highly correlated with emerging market gains — the value of foreign currency-denominated assets rises for U.S. investors as the greenback falls. A lower dollar also helps emerging market economies that have borrowed U.S.-denominated debt.
cnbc.comWhy one portfolio manager has gone all-in on emerging markets ahead of the U.S. election
Emerging markets turned positive for the year this week, and Washington Crossing Advisors' Chad Morganlander said their performance could get even better. "The big picture is that 85% of the global population is domiciled in emerging markets with less than 50% of global GDP. We see the emerging markets as better relative value as well as growth." While emerging markets could be impacted by the results of the U.S. election, Morganlander said his call is not tied to the outcome. The EEM emerging markets ETF, heavily weighted toward China at more than 40%, has underperformed the broader market this year.
cnbc.comOp-ed: Markets are up and the economy is down. Here are some moves investors can make
Andrew Burton | Getty ImagesThe financial markets are rising and the economy is falling. To begin with, the financial markets were doing quite well before the pandemic. In fact, the S&P 500 Index closed at a record high (3,386) on Feb. 19. There's something of a time warp between what's happening in the economy and the performance of the financial markets. Despite the possible causes for confidence described above, there are still no assurances that the financial markets will continue their upward trend.
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