A New Hope for EM or downside Forces Awaken?

EM equity valuations indicate that EM equities have fallen below ‘fair value’ recently, but don’t have much valuation support and offer limited upside, notes Goldman Sachs.

Caesar Maasry and team at Goldman Sachs in their October 16, 2015 research report on emerging markets titled: “A New Hope for EM or downside Forces Awaken,” note EM is not entering a bull phase yet because the rally so far is simply momentum-reversal, not fundamental improvement.

US bad, EM good is a temporary phenomenon

Maasry and colleagues point out that EM assets have bounced off their lows in recent weeks in a dramatic case of momentum reversal. The analysts reckon US bad, EM good trend is limited as a Fed reprieve usually lasts 1-3...