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Analyst: Beware China and Emerging Markets

Wednesday, 12 Nov 2008 | 8:06 AM ET

Equity investors need to keep an eye on the risk surrounding emerging markets, advised MF Global fixed income futures analyst Jessica Hoversen on CNBC Wednesday.

"There's money flying out of these emerging markets and that really makes me nervous," she said.

Developing markets have been on a tear over recent years. But that growth is leveling off, Hoversen pointed out. Indeed some countries are so dependent on high-levels of development that they need double-digit GDP growth not to be in recession.

Trader's Buzz
A check on futures, with Jessica Hoversen, MF Global fixed income futures analyst

China is particularly worrisome, Hoversen suggested. (See her full comments in the video)

"I dont think the market has fully embraced the fact that China could fall very hard," she said. The ripple effects of a China downturn would be felt through Asia and into Europe and the United States, she said.

One positive note, such a downturn would have positive implications for the dollar, she said, as investors seek out safety and stability.

Disclosures:

Disclosure information was not available for Hoversen.

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