Today is Pi day, because at some point during 3/14 we will cross the billion digit level of Π, between bits of a falling snow-flake in the case of New York City which is having a late-season blizzard. It is also a snow day for school children throughout the east coast. Older people have been told to stay home, so market activity is pretty light.
Templeton veteran Mark Mobius was interviewed by George and John Cole Scott who run Closed-End Fund Advisors and the Scott Letter, about the dollar risk to emerging market as rates rise. Mobius said: “Everybody is worried about his interest rate business. The reality is, if you look at the last 10 years, it doesn't make sense because the correlation between interest rates in the past and the movement of emerging markets is just not there.”
He also pointed out that “a number of emerging market currencies have strengthened against the US dollar” and that “the Mexican peso, the Brazilian real, and the Malaysian ringgit have resisted the dollar's strenth.”
He added: “it is important for investors to take a long view and not be swayed by short-term volatility... Regarding [world] stock markets, sometimes they go down together, sometimes they go up together, and sometimes in opposite directions. The correlations are very low.”
He added:: “Pres. Trump is a businessman and a negotiator. He understands that to have a successful negotiation, both sides gain something. Therefore I'm sure bilateral negotiations with the Chinese and Mexico will work out well.”
On Brazil, Mobius said: “People found it difficult to believe the economic situation would turn around in a downtrodden market but we have found that in general, the time of maximum pessimism marks when the bottom is near, the time we want to be investing. Given the dire headlines... corruption scandals. Agency ratings downgrades, and a severe recession,k it may seem surprising that Brazil's stock markets are actually up dramatically. My recent travels there confirmed the investment opportunities we see in Brazil.” More on closed-end funds below for paid subscribers.
So we have a complicated quarterly report to cover today along with some stock trades I opted to do this morning. Today's blog is late because it was so quiet that my husband and I overslept this morning. We are usually awakened by the street and bridge noises.
We have news from Germany, Britain, Finland, Canada, Israel, Mexico, Colombia, Brazil, Japan, Chile, South Korea, and Switzerland. We also have a couple of trades.