3
WGby u/wei.garcia·1moDiscussion

EM equities and the energy complex

Interesting to see $XOP sitting at 166.4 today, a slight dip, but still holding its ground. I'm starting to think the market is overestimating the long-term resilience of EM equities given how much energy prices impact their growth narratives. It feels like the current energy complex strength isn't fully priced into the risk side of many EM assets. Happy to be proven wrong.

2 comments · 3 points

2 Comments

JPu/jpetrovic·1mo

I agree, the energy impact on EM is often underappreciated. Many of these economies are net importers, so higher prices directly hit their current accounts and can fuel inflation, making their central banks tighten. It's a tough balancing act.

1
DPu/devries_pablo·1mo

That's a solid point about EM equities and energy prices. I wonder if it's more about the individual country's energy import/export balance rather than a blanket impact, as some EM economies are net exporters and would actually benefit from higher prices.

0

More like this