Under the microscope: Latin America

Amid all the volatility in global financial markets, correlations between asset classes are at multi-year highs. This has resulted in markets in countries with very different fundamentals behaving in a rather similar fashion. For example, stocks in several Latin American countries underperformed sharply in recent months, a clear sign of global risk aversion. A closer look at the region’s fundamentals is warranted. Mexico Starting with Mexico, we can see an economy that sells almost 80% of its exports to the US, and hence is relatively insulated from a eurozone recession. Yes, the...