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Emerging Markets Gripped by Greed Now Turn to Fed for Fresh Spur

  • Bloomberg’s Fear-Greed indicator at the highest since 2011
  • Emerging-market recovery will be a ‘stop-start one’: Tellimer

Photographer: John Guillemin/Bloomberg

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Traders are likely putting their trust in the Federal Reserve to provide the next spur to an emerging-market rally that may be showing signs of fatigue.

With Friday’s declines delivering a week-ending jolt to the bulls, some of the warning signs took on a more worrying look. The Bloomberg Barclays local-currency bond index registered its first back-to-back weekly drops since June. Bloomberg’s Fear-Greed indicator for the MSCI developing-nation stock gauge -- which measures selling strength versus buying strength -- climbed to its highest in almost a decade, a sign that gains may have been excessive. The deluge of money to emerging-market exchange-traded funds slowed and a basket of currencies had its worst week since the end of October.