Mutual fund managers specializing in precious metals or emerging markets have enjoyed substantial gains during the summer of 2016. The more savvy among them have returned an excess of 20 percent during the 14 weeks period from Memorial Day to Labor Day. Substantial profits were also made by buyers of certain individual stocks or ETFs.
These gains have no resonance with the asset classes which typically benefit when the rates of interest are low. This happened even as the views of the market coalesced into that the Federal Reserve of the United States which will keep the short term rates lower. It may not raise those rates back into their historical precedences.
Since the rates stayed low, the absence of yield from precious metals did not deter investors as a few among them view gold as a kind of hedge against any kind of inflation produced by relaxed monetary policy.
The Brazilian stock market has seen a 31% rise due to the enthusiasm among investors for Brazil’s political leadership change. The country has already exhibited early signs of a recovery of the earnings at the recession troubled companies.