CHART OF THE DAY: The Emerging Markets Have Been A Crummy Place To Invest For Years

Investors head to the emerging markets (EMs) for the opportunity to earn big returns.  Of course, those big opportunities also come with the risk of big losses.

This year's sell-off in EM stocks, bonds and currencies has been particularly brutal with countries like China, Russia, and Brazil deep in the red.

When you consider EM stocks relative to developed market (DM) stocks, you'll notice that the former has been a major underperformer for years.

"Except a short patch during the financial crisis of 2007-8, the period from end-2010 to present marks the only episode during which EM equities have consistently underperformed for over ten years," write Deutsche Bank's Priyal Mulji and John-Paul Smith.  "The EM underperformance gap versus DM has persistently widened over 2013."

"Whilst we do not anticipate that EM equities will give back all of their relative outperformance since 2001, we do think that we are in the middle of a multi-year 10 relative bear market against DM equities, led by the US, which has long been our preferred market," they added

And you can blame the world's second biggest economy.

"The driving force behind the next leg down in GEM is likely to be a further deterioration in the Chinese economy, whose weakness is already having a pronounced effect on commodity prices. Our best guess is that EM equities may underperform their US peers by up to 50% before the cycle is over, but the precise outcome is dependent on a number of variables, most notably government policies, which are hard to predict, and on the outlook for DM economies."

From Deutsche Bank:

Deutsche Bank

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Egypt's Stock Market Is Going Totally Bonkers

REUTERS/Mohamed Abd El Ghany

Traders work at Egypt's Stock Exchange in Cairo July 3, 2013.

The dramatic events in Egypt hit a crescendo on Wednesday when the military removed President Mohamed Morsy.

Despite this political turmoil and uncertainty, the Egyptian stock market is exploding higher. Egypt's EGX 30 is at 5,334, up 363 point or 7.3% on the day.  This is the highest level in a month.

PIMCO's Mohamed El-Erian prefers to look at Egypt's credit-default swaps (CDS), which he believes offers a better and "far more comprehensive" snapshot of the country.

Unfortunately, the latest numbers on the CDS were not immediately available.

For now, here's the year-to-date chart of the EGX (formerly the CASE) 30 via Bloomberg:

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Hot Enough for You? Cool Yourself Off With These 3 Water ETFs

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Microsoft's Big Re-Org Could Come Next Week With These Four Execs Gaining Lots More Power (MSFT)

Microsoft

CEO Steve Ballmer could announce his reorganization plan by next week, reports Businessweek's Dina Bass.

Ballmer is recasting Microsoft as a "devices and services" company
trying to put the company's hardware and cloud offerings on equal footing with software. He's expected to reassemble his top execs to align Microsoft to that new image.

Zynga's hiring of Xbox Chief Don Mattrick as its new CEO, announced Monday, may have put a wrinkle in Microsoft's reorganization plans.

Mattrick was thought to be up for a bigger role running Microsoft hardware. The person that takes on that role will clearly get more power, but they'll also be on the hot seat. Sales of Microsoft's Surface PC have been sluggish so far, according to some reports.

Here's who is expected to gain power now, according to unnamed sources quoted in the Bloomberg report. 

Windows chief Julie Larson-Green: It looks like Larson-Green could get the hardware job, overseeing hardware engineering for all devices, including Xbox consoles and Surface tablets, Bass reports. 

Windows Phone software chief Terry Myerson: Myerson could take over Windows operating system engineering, and that group could be combined with the phone group, according to Bass' sources. That could take Microsoft one step closer to having the same Windows code base work on its PCs, tablets and phones. Today, Windows 8.1 is for PCs and tablets, while Windows Phone is on its own.

Server and Tools chief Satya Nadella: Nadella is currently the head of the $19 billion division that builds the company’s Windows server developer tools and cloud services. He could be put in charge of a new unit that's more focused on cloud services for enterprises.

Skype president Tony Bates: Bates could emerge as the biggest winner, as he could be in charge of acquisitions and developer relationships, and maybe even strategy, Bass reports. That would give him far more power across the company than running the Skype business unit, which is current role. 

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The Surge in Crude Oil Isn’t Over Yet

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Crude Oil Jumps After A Super Bullish Energy Report

Crude oil is up more than 2% today.  A 10:30 am Department of Energy report showed crude stocks for the week ending June 28 fell by 10.3 million barrels versus an estimated -2.32 million.

WTI prices have since come down slightly, and are now at $101.52

Here's the chart:

Brent is also up big today, +1.33% to $105.39.

Gas Buddy says this may drive up gasoline prices in the next few days.

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