Emerging Market Headlines: Greece ETF Sinks, Venezuela Default Likely? -- Barron's Blog

        By Dimitra DeFotis

        Some headlines from developing markets on a day in which the Vanguard FTSE Emerging Markets ETF ( VWO) rose 1.2%

        Venezuela default hawks say the risk is rising as the struggling country moves into hyper-inflation: See " Venezuela's Inflation Nightmare Signals Default May Come Sooner," by Bloomberg.

        STRATEGY: The Greek parliament approved austerity measures attached to its third bailout, and the European Central Bank extended emergency liquidity funding for Greece. With that, Oppenheimer suggested investors " Avoid Emerging Markets & Buy Europe."

        BRAZIL: As the economy struggles, the " Brazil Currency May Hit New Low, " Societe Generale says. The iShares MSCI Brazil Capped ETF ( EWZ) fell slightly Thursday.

        CHINA: In U.S. trading, Chinese A-shares rallied, with the Market

        GREECE: The Global X FTSE Greece 20 ETF ( GREK) was flat while shares

        "A three-year Greek bailout package has been agreed to "in principle" by Eurozone finance ministers, creating hope that Greece has pulled itself back from the flames once again. Yet without a path to growth and recovery (and there isn't one that we can see), there is no path to debt sustainability for Greece. Thus, although a "Grexit" may be off the table for the near term, we are highly skeptical that the current arrangement will succeed. The good news is that there was very little contagion from Greece to the rest of the eurozone even when it looked like a Grexit was in the works ... a more growth supportive ECB monetary policy has reduced the probability that a shock in one country will pull the entire eurozone down with it. This is why we have maintained a positive stance on eurozone equities this year (and continue to do so) and viewed the most recent pullback as a buying opportunity, whether Greece remained in the euro or not."

        For a line-by-line commentary from the former Greek finance minister on the July 12 eurozone bailout agreement -- what he called "the surrender" -- see " The Euro-Summit 'Agreement' on Greece -- annotated by Yanis Varoufakis.

        RUSSIA: For Gazprom ( OGZPY), U.S. Gas Oversupply Could Crush Prices For Years. The Market Vectors Russia ETF ( RSX) rallied 1.8% Thursday.

        INDIA: How Iran's Nuclear Deal Affects India, by the BBC.

        (END) Dow Jones Newswires

        July 16, 2015 16:51 ET (20:51 GMT)

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