Deteriorating fundamentals are weighing on EMs

We are seeing a new bout of deterioration in fundamentals, with earnings revisions worsening and PMIs back on a declining path across emerging markets (EM).

The latter is a sign corporates are back to getting more concerned and are therefore cautious.  The uncertainty surrounding the US-China trade conflict, along with the intellectual property disputes, are having either a direct (through higher costs and lower revenues) or indirect (as companies refrain from spending or investing) impact.  For EM equities to rise further, we need an improvement in fundamentals to feed through to earnings. Dovish central banks and Chinese stimulus help, but we need an end to the trade disputes for a better macro outlook. The Chinese innovators set to ...