{"id":637586,"date":"2017-11-20T04:08:30","date_gmt":"2017-11-20T04:08:30","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2017\/11\/20\/the-disconnect-between-em-gdp-growth-and-stock-market-performance-cant-last-forever-can-it\/"},"modified":"2017-11-20T04:08:30","modified_gmt":"2017-11-20T04:08:30","slug":"the-disconnect-between-em-gdp-growth-and-stock-market-performance-cant-last-forever-can-it","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2017\/11\/20\/the-disconnect-between-em-gdp-growth-and-stock-market-performance-cant-last-forever-can-it\/","title":{"rendered":"The disconnect between EM GDP growth and stock market performance can\u2019t last forever, can it?"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-07\"><\/a> <strong>The disconnect between EM GDP growth and stock market performance can\u2019t last forever, can it? <\/strong>That\u2019s the contention of the Brookings Institution\u2019s Eswar Prasad and Karim Foda (the latter spent a term doing research at the CBE about a decade ago) that gets plenty of ink this morning in the Wall Street Journal. The two found that \u201cOver the past decade, emerging-market economies have nearly doubled in size, growing at an annualized rate of 6.6%, according to data from the International Monetary Fund. The MSCI Emerging Market stock index has climbed at an annualized rate of just 0.6% over that same decade.\u201d <strong>What does this mean?<\/strong> There are four scenarios, only one of which we love: \u201cDeveloped economies could accelerate much more than anyone expects, helping to justify their buoyant markets. Or developed markets could come down, better aligning with their growth. Emerging markets could also slow more than anyone currently expects, so their stock valuations look more justified. <strong>Or emerging-market stocks could boom, better aligning with their generally robust growth.<\/strong>\u201d Read: <a href=\"https:\/\/www.wsj.com\/articles\/developed-economies-stock-gains-pale-next-to-emerging-markets-boom-1511104382\">Developed economies\u2019 stock gains pale beside emerging markets\u2019 GDP boom<\/a>.<\/p>\n<p><strong>Conventional wisdom has it that rate hikes in the US are bad for EM. <\/strong>And Goldman Sachs apparently sees the Fed hiking rates four times next year, against an expectation of three rate increases in the wider community of rate-watchers, <a href=\"https:\/\/www.reuters.com\/article\/us-usa-fed-goldman-sachs\/goldman-sachs-sees-fed-raising-rates-four-times-in-2018-idUSKBN1DK04C?il=0\">Reuters reports<\/a>.<\/p>\n<p><strong>Are we nearing a market top, globally? <\/strong>While you\u2019re reading the Journal, check out <a href=\"https:\/\/www.wsj.com\/articles\/is-this-the-top-of-the-market-1510856195\">How to spot a market top<\/a>, which marshals its inner Business Insider to argue, \u201cthe issue isn\u2019t whether the market will crash, it is how much money investors will make, or lose, in the coming years. With cash sloshing around the global financial system, prices can go higher, but investors who buy at those prices shouldn\u2019t expect their returns to match those earned in the past few years.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The disconnect between EM GDP growth and stock market performance can\u2019t last forever, can it? That\u2019s the contention of the Brookings Institution\u2019s Eswar Prasad and Karim Foda (the latter spent a term doing research at the CBE about a decade ago) that gets plenty of ink this morning in the Wall Street Journal. The two [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9272],"tags":[72,1510],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-637586","post","type-post","status-publish","format-standard","hentry","category-the-macro-picture","tag-enterpriseam","tag-the-macro-picture","wpautop","entry"],"acf":{"mongo_id":"2e023273-0b1d-4d70-b0d0-cb63bdabf690","order":"0","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[637565],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The disconnect between EM GDP growth and stock market performance can\u2019t last forever, can it? - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2017\/11\/20\/the-disconnect-between-em-gdp-growth-and-stock-market-performance-cant-last-forever-can-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The disconnect between EM GDP growth and stock market performance can\u2019t last forever, can it?\" \/>\n<meta property=\"og:description\" content=\"The disconnect between EM GDP growth and stock market performance can\u2019t last forever, can it? 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Statistics published by the Institute of International Finance (IIF) shows that debt-to-GDP levels among developing economies has risen to 49.7% in\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/5\/1569.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":568808,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/02\/04\/trade-growth-between-emerging-economies-is-flatlining\/","url_meta":{"origin":637586,"position":1},"title":"Trade growth between emerging economies is flatlining","author":"enterpriseam admin","date":"4 February 2020","format":false,"excerpt":"Trade growth between emerging economies is flatlining: Expectations that sluggish growth in developed economies would stimulate intra-EM trade look to have been proven wrong as trade between emerging economies continues to flatline, Steve Johnson writes in the Financial Times. Although EM exports heading to other developing countries did leap from\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/2\/57.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":573355,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/07\/29\/developing-economies-are-threatened-with-distress-as-they-struggle-to-pay-down-their-growing-debt-piles\/","url_meta":{"origin":637586,"position":2},"title":"Developing economies are threatened with distress as they struggle to pay down their growing debt piles","author":"enterpriseam admin","date":"29 July 2020","format":false,"excerpt":"Growing debt piles are becoming increasingly insurmountable for some developing economies as they struggle to find the resources to repay bns of USD borrowed from private investors over the past decade, the Wall Street Journal says. The pandemic has made matters worse, but these countries were already ill-prepared to both\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/7\/244.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":598434,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/05\/26\/em-pmis-best-developed-economies-for-first-time-since-2013\/","url_meta":{"origin":637586,"position":3},"title":"EM PMIs best developed economies for first time since 2013","author":"enterpriseam admin","date":"26 May 2019","format":false,"excerpt":"Emerging markets have pulled ahead of advanced economies for the first time since 2013 on the latest purchasing managers\u2019 indices (PMI) for services and manufacturing, the Financial Times reports. After a bumpy year, emerging markets\u2019 aggregate reading for the two indices comes in at 52.4 for EMs, suggesting that annual\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/5\/537.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":564326,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/08\/24\/commodities-strong-earnings-could-resuscitate-emerging-market-stocks-say-analysts\/","url_meta":{"origin":637586,"position":4},"title":"Commodities, strong earnings could resuscitate emerging-market stocks, say analysts","author":"enterpriseam admin","date":"24 August 2021","format":false,"excerpt":"A \u201clost decade\u201d for emerging-market stocks could be coming to an end, as the commodities boom and earnings optimism perk investors\u2019 interest in companies in the developing world, Bloomberg reports. Goldman Sachs, Bank of America and Lazard Asset Management all expect inflows into undervalued EM equities to pick up as\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/8\/516.png?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":597367,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/07\/24\/the-imfs-emerging-markets-outlook-is-looking-sluggish-amid-expectations-for-subdued-global-growth\/","url_meta":{"origin":637586,"position":5},"title":"The IMF\u2019s emerging markets outlook is looking sluggish amid expectations for \u201csubdued\u201d global growth","author":"enterpriseam admin","date":"24 July 2019","format":false,"excerpt":"The IMF\u2019s emerging markets outlook is looking sluggish amid expectations for \u201csubdued\u201d global growth: The IMF has revised downwards its forecasts for emerging markets\u2019 GDP growth in its July update of the World Economic Outlook, saying it sees EMs growing 4.1% and 4.7% in 2019 and 2020, respectively. The figures\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/7\/2565.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/637586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=637586"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/637586\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/637565"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=637586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=637586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=637586"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=637586"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=637586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}