Investor fear of risk hurts Brazil

Recent news from the emerging markets paints two contrasting pictures. On the one hand, stock market prices have been falling, suggesting weakness. On the other hand, economic and policy indicators have been exceptionally strong. The growth of economic activity has picked up, as good growth has spread beyond the US, becoming more evenly distributed among developed countries and exceptionally good among emerging economies. This must be very helpful to company profits, so earnings per share can be expected to grow very rapidly. Despite the winter peak in oil prices, inflation has been wel...