Tuesday, 25 May 2021

Markets rise, debt levels a risk for emerging economies

Markets rose on Monday.

The S&P 500 rose 1.0 percent, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.2 percent.

With stocks rebounding from last week's falls, JPMorgan noted that the “‘buy the dip’ mentality has been remarkably strong this year”.

Tom Lee, head of research at Fundstrat Global Advisors, certainly appears optimistic, suggesting that “when equities break out of this range, the next move is a substantial rise higher”.

However, Steve Cochrane, chief Asia-Pacific economist at Moody’s Analytics, told CNBC on Monday that swelling debt levels in emerging economies may hold back their recovery.

“The debt loads rose most in emerging markets and they may have the most difficulty in terms of taking care of this debt going forward,” he said.

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