As 2007 draws to a close, how should you play emerging markets? Find out from Tim Seymour, aka The Ambassador.
Momentum has been broken and a bunch of big houses have begun to downgrade emerging markets, explains Seymour. Morgan Stanley came out with a big sell and Deutsche Bank talked about caution.
From a technical perspective I think iShares MSCI Emerging Markets Indx (EEM), iShares MSCI Brazil Index (EWZ) and Petrobras (PBR.A) all probably have 5% -10% downside, he reveals.
Also, the other thing to watch is liquidity,” Seymour adds. Some of the emerging markets close for a week at a time, so be careful.
“I want to see more pain before I get long emerging markets,” adds Jeff Macke.
The bottom line: Be careful of emerging markets through the end of the year.