A survey of Bloomberg subscribers found that emerging markets no longer represent the most attractive investment destination for investors and analysts, signalling a change in sentiment from the year’s start.
A similar poll taken in January rated China as the best market for investors, followed by Brazil.
Brazil and China, along with Russia and India, make up the so-called “BRIC” nations which have recently been popular for higher-risk portfolio diversification. All four nations are emerging markets with significant growth, industrial development and strong exports of energy, commodities, and/or manufactured goods.
The shift to the United States seems to signal sinking confidence in the global economic recovery, which implies that investors still view US equities and bonds as the safest investments. In the survey, 42 percent of investors said that the global economy was “deteriorating.”
Although Brazil grew at its fastest rate in fourteen years last quarter, many analysts suspect the Brazilian central bank will raise interest rates to prevent overheating. Much of Brazil’s growth has come from commodities and petroleum exports to China and the United States, which would fall if the global economy stalled.
Elsewhere, crude oil futures fluctuated after shedding early gains, underscoring the uncertainty surrounding the economic climate.
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