Market Digest \u2013 Week Ending 3\/5\r\n\r\nIt was a big week for stocks, especially overseas. The S&P 500 rose 2.7% while the FTSE All Country ex US Index rose 5.5%, nearly erasing its gap to the US YTD. Both indexes are now down a little over 2% for the year. Monetary easing in China lifted spirits, as did a strong US jobs report, but most of the gains in equities and commodities appeared to be sentiment driven as investors determined that early year declines were overdone. Oil was up over 10% and gold added to its 2016 gains, up 3% for the week.\r\n\r\nWeekly Returns:\r\n\r\nS&P 500: 2,000 (+2.7%)\r\nFTSE All-World ex-US: (+5.5%)\r\nUS 10 Year Treasury Yield: 1.87% (+0.09%)\r\nGold: $1,259 (+3.0%)\r\nUSD\/EUR: $1.101 (+0.7%)\r\n\r\nMajor Events:\r\n\r\n \tMonday \u2013 China lowered its reserve requirement for banks by 0.5%.\r\n \tTuesday \u2013 The Wall Street Journal reported that some of America\u2019s largest shale oil producers are starting to cut output for the first time in years.\r\n \tTuesday \u2013 China\u2019s manufacturing purchasing index fell to the lowest level in four years.\r\n \tTuesday \u2013 Presidential nominee frontrunners Trump and Clinton fared well enough on Super Tuesday to help cement their status, though the opponents of each vowed to continue.\r\n \tWednesday \u2013 Sports Authority filed for bankruptcy. The chain is expected to continue to operate many stores.\r\n \tWednesday \u2013 Former Chesapeake Energy CEO Aubrey McClendon was indicted for conspiring to rig the price of oil and gas leases. A day later he died in a single car crash.\r\n \tWednesday \u2013 Oregon governor Kate Brown signed a minimum-wage law that makes it the first state to mandate higher wages in cities than in rural areas.\r\n \tFriday \u2013 North Korea ordered its military to be on standby for a nuclear strike at any time, escalating tensions following sanctions related to the country\u2019s nuclear program.\r\n \tFriday \u2013 US employers added 242,000 jobs in February, more than expected. However, average wages declined 0.1%.\r\n\r\nOur take:\r\n\r\nFor most of the last five years, emerging market stocks and bonds have been brutal to own. 2016 started out no differently. But after this week\u2019s gains, emerging markets stocks are up for the year while the US and developed international stocks remain down. Local currency emerging market bonds are up about 4% for the year.\r\n\r\nThe rally has been driven by a rebound in commodity prices and a view that the US will be very measured in raising interest rates. Much of the gains in stocks and bonds have been driven by currency.\r\n\r\nEmerging markets securities are volatile - there is no doubt about it. That is why we think they should be a relatively small part of most portfolios. But small doesn\u2019t mean non-existent. We typically allocate about 30% of equity allocations outside the US. Of that, we generally target about 30% to emerging markets. That comes to just under 10% of total stocks. We believe this level provides important diversification and opportunity for higher return.\u00a0Diversification because emerging markets stocks don\u2019t always move in the same direction as US stocks and higher return potential because their added risk can mean bigger reward over time.\r\n\r\nLike any other asset class, emerging markets stocks are sometimes loved and sometimes hated. When they are loved, it usually means they are expensive. When they are hated it usually means they are cheap. Right now, we view them as relatively attractive compared to US assets.