“It does appear that emerging-market investors are slightly more sanguine about risks through the end of the year than what you’re seeing in developed markets,” said Nick Stadtmiller, a New York-based strategist at Medley Global Advisors. “As long as global liquidity remains ample, and as long as global markets at least hold their ground, I would expect emerging-market assets to perform well. Yields on many emerging-market assets are high, especially relative to rock-bottom yields on developed market assets.”
Traders across the world may be coming around to the idea that the U.S. election isn’t going to be the tumultuous event it was once expected to be. But the real believers seem to be in emerging markets.
Optimism that the November election result will go uncontested and speculation that a U.S. stimulus package will have to be agreed whatever the outcome are damping concern about fluctuations through year-end. Yet, while U.S. VIX futures declined last week as bets on likely price volatility eased, the drop was slower than for emerging markets.
