The weakness today in the emerging markets is widely being attributed to the
situation in Venezuela, where President Hugo Chavez's nationalization plans
have sparked a sharp selloff. Tuesday alone, Venezuelan shares are down
about 10%. Today's weakness in the emerging markets, which includes notable
countries such as Brazil and Russia, is rooted partly in the weakness in
commodity prices.
I wrote about this early last week as a factor that
investors should be watching. In addition to weakness in equities,
more spillover effects should be watched for. In particular,
investors would be wise to watch credit spreads and the currencies of
commodity-based countries.
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Tony Crescenzi Blog Chain-Store Sales Come In Strong 1/9/2007 10:42 AM EST This indicates that the economy's overall growth rate could inch upward.
Tony Crescenzi Blog Bond Volatility Holds Near Decade Low 1/9/2007 9:47 AM EST The low level reflects complacency about inflation and the outlook on interest rates.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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