Sao Paulo Stock Exchange

Perhaps you can seem like a strange argument, but is worth remembering that the crisis has made them lose value strongly largely for reasons unrelated to the own of the same situation but the need for investors to become of liquidity and seek safer investments. Investor appetite for risk positions already is being felt in stock market indices. In the case of Brazil, the Bovespa of the Sao Paulo Stock Exchange index, has registered an increase of 75% from their minimum levels for the month of October 2008. Also emerging markets bags have gone 50% in the past two months. Thus reflects it the MSCI index of emerging markets (NYSE:EEM), which follows the performance of 23 emerging markets. The return of investor appetite for risk, think it is undoubtedly good news though perhaps is a little excessive behavior that is watching against the still insufficient evidence that the crisis has begun to hit back. Beyond my doubts about informed actions Inverter (is that many times, the behavior that exhibit the capital lacks rationality), one can think of the positive effects which the return of optimism to the markets might entail for the economies. Without doubts, optimism in the markets can generate an effect contagion positive on the consumption of households and business investment, since before change of scene perception, can be encouraged to reduce their precautionary behaviors.

Thus, the prophecies of recovery are prophesy investors are would be auto met. Thus, what is observed in stock markets gives rise to hope with a speedy recovery of the global economy before a change of mood that translates into greater demand. But be careful with the risks that can generate an excessive optimism (if that is what is happening), since extreme behaviors of investors may give rise to destabilizing movements in the markets. Thus, it seems a win-win situation can transformed into an element that hinders economic recovery goals.