Troubled times to last a while longer for emerging markets, say hedge funds

To blunt the blow of the trade war, Beijing recently switched its economic priorities and is ready to deploy infrastructure spending again

Hedge funds haven’t been this bearish for years.

In the last month, funds quickly sold down their positions in emerging markets to levels last seen in August 2015, when China scared the world with a surprise devaluation, and early 2016, when Beijing terminated a silly experiment with circuit breakers in a futile attempt to rescue the stock market.

Short, not sweet

Emerging markets are in pain. Currencies alone are down 13 per cent for the year as contagion starts to spread across continents, from Argentina to Indonesia. Bonds and stocks have tumbled.

When will the bleeding stop? 

In a case