The Lowdown on the Big Markets

MEXICO
Still the favorite of Latin stock-pickers. The economy is chugging along and should grow by 5% in 1998. A robust U.S. economy should help Mexican exporters. Construction issues remain strong, and consumer and banking stocks appear poised for recovery. But look out if Brazil's problems or a Wall Street nosedive dampen sentiment across the region.

BRAZIL
Asian flu has the real under pressure, and interest rates are way up. That will limit economic growth to 1% in 1998 and put a lid on stocks. Recently privatized mining conglomerate Vale do Rio Doce is a favorite defensive choice. Telebras and regional subsidiaries Telesp and Telerj appear inexpensive as the government prepares to privatize them.

ARGENTINA
Close trade and economic ties to Brazil may hurt one of the region's shining stars. Recently, analysts have lowered 1998 GDP growth forecasts from 7% to 5%. But as long as Brazil steers clear of any major currency devaluation, Argentina's economic future should stay on track.