Trade Wars, Emerging Markets and DeepSeek: 3 Stocks to Watch

Core Insights - The U.S. policy shifts under the Trump administration, particularly regarding tariffs and immigration, are significantly impacting emerging market investors and global geopolitical dynamics [1][2][6]. Emerging Market Impact - Emerging countries with high trade exposure to the U.S., such as Mexico and China, are expected to be the most affected by proposed tariffs, with Mexico facing a potential 25% tariff and China a 10% tariff [2][8]. - The strengthening of the U.S. dollar post-election is adversely affecting emerging markets, especially those with substantial dollar-denominated debt [6]. Investment Strategy Adjustments - Investors are reassessing strategies, with some considering reallocating investments to less affected markets like India, which is less exposed to U.S. trade policies due to its domestically driven market [3][11]. - Brazil may benefit from trade tensions that redirect demand for agricultural products, despite not being a direct target of U.S. trade measures [3][10]. Stock Recommendations - Three emerging market stocks are highlighted for their growth potential: - MercadoLibre (MELI): Expected to benefit from increasing internet penetration, with projected sales and earnings growth rates of 22.5% and 33.3% for 2025 [12][13]. - Yatra Online (YTRA): Anticipates significant growth in the MICE sector, with revenue and earnings growth rates projected at 90.9% and 350% for fiscal 2025 [15][16]. - WNS (WNS): Engaged in business process management, with revenue and earnings growth rates of 7.4% and 11.1% for fiscal 2026 [16][17].