Via Bloomberg
The Copper to gold ratio has plummeted on the US's airstrike last week in Baghdad killing one of Iran's top generals. The Morgan Stanley Capital International Emerging Market index started the month of January in a strong bull market. However, selling pressure is going to build quickly now for EM stocks if the latest US/Iran chapter escalates further.
The poor ISM manufacturing data out of the US last week only adds to the geo-political concerns for stocks with the market currently bidding the safe haven assets of gold yen, and US treasuries. So, watch out for EM stocks losing ground the longer this continues. Of course, a rapid de-escalation will reverse this outlook.
