China and Dollar Test Emerging Markets’ Bull Run

Factors supporting the market no longer look so solid; rising U.S. Treasury yields and a stronger dollar pose risks

Richard Barley

April 30, 2018 4:51 a.m. ET

Good times can’t last forever. Last year, strong global growth and a weak dollar lit up emerging-market stock and bond returns. But the low-hanging fruit has been harvested. And now times are looking tough.

After a strong start to 2018, emerging-market stocks have suffered, and the stronger dollar has hit bond returns. The JP Morgan GBI-EM local-currency bond index now up only 1.8%, versus 5% in January.

Factors...