Let us not overlook the explosive growth in emerging markets

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Subprime JD's picture
Subprime JD
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Joined: Feb 17 2009
Posts: 562
Let us not overlook the explosive growth in emerging markets

Check out South America GDP by country,

South American Rank World Rank Country 2009 GDP (PPP)
millions of International dollars
South America 4,066,915
1 9 Brazil Brazil 2,024,000
2 23 Argentina Argentina 558,000
3 28 Colombia Colombia 400,300
4 31 Venezuela Venezuela 355,200
5 42 Peru Peru 253,400
6 43 Chile Chile 244,300
7 63 Ecuador Ecuador 107,100
8 91 Bolivia Bolivia 45,130
9 94 Uruguay Uruguay 44,050
10 106 Paraguay Paraguay 28,280
11 154 Suriname Suriname 4,182
12 160 Guyana Guyana 2,973

Thus year, Brazil is expected to grow at a 10% rate. Argentina at 7% growth yoy.

Then we have The Association of Southeast Asian Nations, or ASEAN.  10 nations make up this group.

ASEAN spans over an area of 4.46 million km2 with a population of approximately 580 million people, 8.7% of the world population. In 2009, its combined nominal GDP had grown to more than USD $1.5 trillion.[7] If ASEAN was a single country, it would rank as the 9th largest economy in the world in terms of nominal GDP. ASEAN economic growth expected to be over 5.6% yoy for 2010.

Then of course there is China, growing at a 10% rate. This will slow eventually but the point is that these emerging markets are on fire. With little debt, they have plenty of room to lever up and follow the big boys to the path of the ponzi.

Yum Foods, the multinational food corporation, reported that its sales in foreign markets were up double digits. An interesting fact was that 60% of Yum revenue is generated overseas! This phenomenom holds true for many companies in the S&P 500. Intel, Apple, HP, MCD, Pfizer, have strong overseas revenue.

Ill do more research but basically my point is that the S&P 500 companies are not entirely US based anymore. So if US data is poor but emerging market data is high, why should those stocks fall so much?





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