Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Charts Show Why Emerging Markets Will Be an Essential Part of Your Portfolio Going Forward

Stock-Markets / Emerging Markets Jun 27, 2017 - 01:09 PM GMT

By: John_Mauldin

Stock-Markets

BY STEPHEN MCBRIDE : A major theme at the 2017 Strategic Investment Conference was the shift in economic power from developed markets to emerging markets (EMs).

For example, in 1960, the combined GDP of China and India made up only 5% of global GDP; today, it’s 30%.

In 1970, the G7 bloc made up half of global trade; now it makes up just 30%. It’s no wonder emerging markets are growing at almost three times the rate as the G7.


The Rise of China and India

This chart from JP Morgan shows the re-emergence of China and India over the last four decades.

Source: Michael Cembalest, JP Morgan

With major economic changes now underway in both nations, they are likely to play an increasingly larger role in the world going forward.

Here’s a look at some of the biggest developments in EMs and their wide-ranging implications for investors.

One Belt, One Road

Dubbed “the new Silk Road,” One Belt, One Road aims to create the world’s largest platform for economic cooperation between China and the rest of the world.

It's an infrastructure project unlike anything we have ever seen.

Source: McKinsey Global Research

As founder and CIO of Morgan Creek Capital Management Mark Yusko quipped at SIC 2017, “One Belt, One Road, Multiple Bull Markets.”

China’s Growing Middle Class

The American consumer still drives the global economy, but that baton will likely be passed to China’s middle class sometime this century.

According to McKinsey, just 4% of China’s urban population was considered middle class in 2000. By 2020, 76% will be—a 19-fold increase. And with more spending power comes greater consumption.

Boston Consulting Group projects China’s total consumption will increase by 55% to $6.5 trillion by 2020. 

Source: Economist Intelligence Unit, BCG Analysis, WebForum.org

That’s more than the UK, Germany, and France combined.

India’s Banks

One of India’s massive barriers to growth has been the volume of non-performing loans in its banking system. It has risen fourfold since 2009.

Much was made of President Modi’s move to demonetize the country in December.

However, taking 85% of the currency out of circulation did achieve something very important. It recapitalized India’s banks. Since demonetization, over $80 billion has flowed into the banking system.

With an exploding population now accounting for over 17% of the global total, the set-up in India looks very bullish.

EMs Will Overtake US Equities

With these massive bullish developments, there’s little doubt EM assets will play a key role in your portfolio going forward.

And despite growing at twice the speed of US equities, EM assets are still very cheap relative to developed markets today.

Asset management firm GMO projects that returns for US equites and bonds will be negative over the coming years… while EMs will continue to generate profits.

However, these aren’t only projected results. Since the beginning of 2017, the MSCI Emerging Market Index has outperformed the S&P 500 by 154%.

Download a Bundle of Exclusive Content from the Sold-Out 2017 Strategic Investment Conference

Get access to exclusive interviews with John Mauldin, Neil Howe and Pippa Malmgren from SIC, an ebook from renowned geopolitical expert George Friedman and bonus SIC 2017 content…

Claim your SIC 2017 bundle now!

John Mauldin Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules