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Bruised emerging markets are battle-ready for a recession in US

This time, the selloff in emerging markets began in the first quarter of 2021, a full year before it started in developed markets

Photo: Reuters
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Growth in developing economies will continue to outpace the U.S., providing support to local currencies. Photo: Reuters.

Netty Ismail | Bloomberg
Emerging markets are well positioned to stare down a US recession and may even be able to lure investors their way.

That’s the message from money managers including JPMorgan Chase & Co. and Deutsche Bank AG even as fears of a contraction in the world’s largest economy spark a dash into Treasuries and other haven assets. Beyond the short-term turbulence, they say, developing nations will be cushioned by cheap valuations, higher yields, faster growth and above all, a resurgent China.

That sounds like a tall order given the current scale of losses in emerging markets. Stocks and bonds have been gripped by