So much for the emerging market sector being a safe place to invest in 2014. EEM Gave up 2.69% last week and is now down fractionally on the year. Much of the blame goes to Brazil.
EWZ was down 6.69% last week and is also down slightly for 2014 after being up well into the teens for 2014. A combination of very weak economic numbers putting pressure on Brazilian stocks and the first round of elections in Brazil pushed EWZ well into the 40’s.
Despite weak emerging markets the VXEEM curve remained in contango. The VXEWZ curve continues to have that shape that has no common name. October futures remain elevated with the contracts that expire after both rounds of national elections settling at more reasonable levels.