Global Market | US-Israel-Iran conflict has put emerging-markets revival to test

Core Viewpoint - Emerging markets are experiencing significant short-term losses, but long-term investment cases remain strong according to several money managers [1][6]. Group 1: Market Performance - The MSCI equity index recorded its largest weekly drop in six years, while bond yields have increased sharply [1][6]. - Investors added $12.6 billion to emerging-market stocks and bonds in the week through Wednesday, indicating a potential buying opportunity amid price dips [2][6]. Group 2: Investment Sentiment - Money managers from firms like Pacific Investment Management Co, Barings LLC, and T Rowe Price Group Inc are mostly holding off on major portfolio shifts, despite some marginal adjustments [1][6]. - The conviction in emerging markets is driven by diversification from US assets, attractive valuations, and solid economic growth, which many believe will reassert themselves once geopolitical tensions ease [2][6]. Group 3: Risks and Adjustments - Rising Brent crude prices, surpassing $90 a barrel, and escalating conflicts in the Middle East are raising concerns about economic growth in import-reliant countries [2][6]. - JPMorgan Chase & Co has reduced its recommendations on emerging-market assets three times in the past week, moving to tactical underweight positions on sovereign and corporate dollar bonds due to increased uncertainty [5][6].