Emerging Markets Performance
Track emerging market performance as a global recession indicator. EM weakness often precedes developed market downturns.
Current Value
Trigger Level: EM outperformance = late-cycle rotation
AI Analysis
As of February 22, 2026, the Emerging Markets indicator stands at 33.6, indicating a bullish trend for emerging markets. However, this outperformance suggests a deceleration in the U.S. economy, signaling a late-cycle rotation that raises concerns about recession risk in the near future.
What is the Emerging Markets?
Emerging market equity and debt performance reflects global risk appetite and capital flows. Tracked via indices like MSCI EM and ETFs like EEM, it captures the health of the global growth cycle.
Why It Matters for Recession Risk
Emerging markets are sensitive to global liquidity, dollar strength, and commodity prices. Broad EM weakness often precedes developed market downturns as global financial conditions tighten.
Historical Context
EM equities peaked well before the 2008 global financial crisis and the 2020 downturn. Capital flight from emerging markets is a classic early warning of global risk aversion.
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