This is via Bloomberg on European equities, on an increasing correlation between MSCI Europe and MSCI Emerging Markets.
I fell off my chair due to the headline, but am back up again and sharing the info
- The 30-day correlation between MSCI Europe and MSCI Emerging Markets has risen to 0.7, the highest in almost seven months, and up from 0.1 seen in June.
- with the developing world set for a rocky future as rising U.S. interest rates dent appetite for riskier assets, investors are asking: is the link to emerging markets Europe's biggest Achilles' heel?
- "Europe's economy is much more open than the U.S. economy with the export sector being a larger part of GDP. This means that Europe has a larger sensitivity to EM growth and global growth in general," said Peter Garnry, head of equity strategy at Saxo Bank A/S in Hellerup, Denmark. "Europe's equity markets have a larger share of stocks with exposure to industrial and materials stocks, which are directly linked to emerging market growth."
Here is the link for more explanation … BYO barf bag, K?
