A Bloomberg study of 17 emerging markets has found a 42% correlation between gross domestic product per capita and stock performance since the virus-fueled risk sell-off began on Jan. 20 until early this week. The correlation between GDP per capita and currency returns was 31%.
Look no further than emerging markets for evidence that the K-shaped recovery is taking hold.
Stocks and currencies from wealthier developing nations are outperforming their poorer peers amid the coronavirus outbreak, magnifying the gap between the “haves” and “have-nots” of the global economy. The gulf may even get wider if the pandemic leads to deeper recessions in less wealthy nations due to their lower capacity for containing the virus.
