Bernanke Sticks To His Guns: No Rate Increase Until 2014

Bernanke Sticks To His Guns: No Rate Increase Until 2014

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Even after a very impressive unemployment report last Friday, in which the unemployment rate dropped to a three-year low of 8.3%, Ben Bernanke reaffirmed his plans to keep interest rates near zero through 2014.

In testifying before the Senate Budget Committee, Bernanke said that the low unemployment rate veiled weakness in the U.S. labor market, according to Bloomberg.

“It is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work,” Bernanke told the committee. “There are also a lot of people who are either out of the labor force because they don’t think they can find work” or who have taken part-time jobs (via Bloomberg).

Low rates indicate two primary things: the Fed chairman believes the economy is still weak, and money will continue to be pushed into riskier assets such as stocks because bonds will not provide sufficient returns for many investors.

Business Section: Investing Ideas

If you are disappointed by the prospect of lower US economic growth, have no fear. There are other ways to add growth to your portfolio.

One such idea is emerging markets, which tend to run to the beat of their own drum, relative to developed economies such as the US. These countries tend to have higher economic growth rates as their economies develop and their populations grow.

We ran a screen on US-traded companies based in the BRIC countries for those with high positive correlation to the volatility (VIX) index. This indicates that these stocks have tended to perform well during times of market uncertainty and volatility.

Do you think volatility lies in the future?

 

Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for all the stocks mentioned below:

 

1. Charm Communications Inc. (CHRM, Earnings, Analysts, Financials): Operates as an advertising agency in China. China. Correlation with the VIX index at 0.83 over the last 60 days.

 

 

2. China Telecom Corp. Ltd. (CHA, Earnings, Analysts, Financials): Provides wireline and mobile telecommunications services in the People's Republic of China. China. Correlation with the VIX index at 0.778 over the last 60 days.

 

 

3. WNS (Holdings) Ltd. (WNS, Earnings, Analysts, Financials): Provides offshore business process outsourcing (BPO) services. India. Correlation with the VIX index at 0.778 over the last 60 days.

 

 

4. MakeMyTrip Limited (MMYT, Earnings, Analysts, Financials): Provides travel products and solutions in India and the United States. India. Correlation with the VIX index at 0.683 over the last 60 days.

 

 

5. Gafisa S.A. (GFA, Earnings, Analysts, Financials): Operates as a homebuilder in Brazil. Brazil. Correlation with the VIX index at 0.656 over the last 60 days.

 

 

6. Noah Holdings Limited (NAOH, Earnings, Analysts, Financials): Engages in the distribution of wealth management products to the high net worth population in China. China. Correlation with the VIX index at 0.638 over the last 60 days.

 

 

7. Jiayuan.com International Ltd. (DATE, Earnings, Analysts, Financials): Operates an online dating platform in the People's Republic of China. China. Correlation with the VIX index at 0.617 over the last 60 days.

 

 

8. Shanda Games Limited (GAME, Earnings, Analysts, Financials): Engages in the development and operation of online games in the People's Republic of China. China. Correlation with the VIX index at 0.596 over the last 60 days.

 

 

9. Home Inns & Hotels Management Inc. (HMIN, Earnings, Analysts, Financials): Develops, leases, operates, franchises, and manages a chain of economy hotels in the People's Republic of China. China. Correlation with the VIX index at 0.587 over the last 60 days.

 

 

10. China Unicom (Hong Kong) Limited (CHU, Earnings, Analysts, Financials): Engages in the provision of GSM and WCDMA cellular, and related telecommunications services in the People's Republic of China. Hong Kong. Correlation with the VIX index at 0.54 over the last 60 days.

 

(Written by Alexander Crawford. Price data sourced from Yahoo! Finance.)

 

 

Use Kapitall's Tools: Looking for ways to analyze this list?

Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall's tab navigation to browse through the data…

 

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