February 23, 2022, 1:42 pm EST
The Collapse of Emerging Markets
Once shining stars of the emerging markets, Russia and China, are in the process of collapsing. Russia ETF (ERUS) is down about -40% from about 5 months ago. China ETF (FXI) is also down about -34% from the 2021 high. More importantly, the downtrend seems to be intensified for further new lows.
Both Russia and China exercise their military power toward their neighbor countries, Ukraine and Taiwan. Their desires to invade others’ regions so they can expand their power are manifested. But the prices of wars display in their stock markets as the immediate results.
The domestic economies of Russia and China are also about to break down. Russia would encounter sanctions. China already faced a series of difficulties from its housing bubbles as Evergrande Group revealed.
Emerging markets are becoming submerging markets.