Fundamentals for emerging markets aren't deteriorating, and they've got momentum, says CIO Jack Ablin of BMO Private Bank. He likes Mexico, Russia, and India. Fred Katayama reports.
Stocks following with financials leading the downturn. Stocks are on track for their first weekly loss in six weeks. Joining us now from Chicago for deeper look at the markets Jack Amylin he's chief investment officer BMO prize. We'll check markets down yet again today do you see this is profit taking from that's surge we've seen since mid February or are we heading for another correction. I think it's of little. A profit taking we had a nice surge that will last several weeks and you know we we had some. Pretty support of five monetary policy of at least from abroad. And maybe they're just at least have the near term not much less to push stocks higher. Well jacket with a dollar it's up for a fifth straight session now on commodities are trading lower on that. Gonna further rising greenback and crimp the commodities come back and thereby energy stocks and the markets in general. It could and it's all predicated on the pad. If you look at the dollar relative to many are trading partners' currencies it is already pretty expensive. So I don't believe without. You know we take the fat out of the equation which I guess heart and do dollar should probably tracked our. Aren't we should have to worry about. Monday's. Do you feel that energy and as a sort of bond prices. It's that way I think that that was really the big uncertainty going into this year and of course. Oil prices are that connective tissue between the economy and credit markets and so in the end of January beginning of February when. Oil sustained a barrage of bad news and maintained itself in the high twenties I think that was. Taken is pretty support of where the price ought to be at least the the bottom should be. You know Euro leaders macro strategy report that US large caps they're expensive again. Would you then therefore recommend buying small and yet it. Certainly smaller mid caps are better positioned. And especially if it investors believed that the dollar's strength will continue. Small admitted should be relatively. Last disadvantage. But. Yeah I think that first quarter earnings season coming up and a couple weeks it's gonna be a true test for us 500 company. Want to be watching for those reports you'll also note your report that emerging market trends are positive we've seen stocks there a staging a comeback. Is it kind of buying emerging market funds on the cheap. I'll tell you they certainly are cheap Brad if you look at them relative to their history their trading at probably a 2225%. Discount to their historical mediums. You add the fact that if fundamentals appear to be at least not deteriorating and of course we've got incrementally positive momentum. And I think emerging could do pretty well this year. All any particular countries that you. I mean I think if you wanna get in there with both feet and really played the commodity rebound you can hat you have Russia. On the other hand if you wanted to sort of take that may be a baby step in and try to insulate yourself you could you could yeah invested India. And of course Mexico. You know unless you're concerned about a trump presidency perhaps. Mexico its leverage to the recovery in the last hour with Jack thanks thanks that's investments that's appreciated. Thank you Fred our thanks to Jack Kaplan of the in the private bank I'm Fred Katayama this is.