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Emerging Market ETFs Bounce on Government Shutdown

By  +Follow October 4, 2013 10:53AM
Tickers Mentioned:

Emerging market ETFs were boosted Thursday as the shutdown of the American government entered its fourth day. While political turmoil usually sends investors fleeing from emerging markets, the belief that the shutdown and pending debt-ceiling fight will keep the Federal Reserve’s bond-buying program intact and at current levels appears to have dissuaded fears and helped boost stocks in Indonesia, the Philippines, and India.

Today’s gains stretched across the board for various emerging market ETFs. The iShares MSCI Emerging Markets Indx (EEM) gained over 1 percent, the Vanguard FTSE Emerging Markets ETF (VWO) was up just over 1.15 percent, the WisdomTree India Earnings Fund ($EPI) gained over 1.5 percent, the PowerShares India Portfolio ($PIN) rose just over 1.5 percent, iShares MSCI Malaysia Index Fund (EWM) leapt almost 2.5 percent, and the iShares MSCI Indonesia Investable Market Index Fund (EIDO) was up just under 2.5 percent.

Emerging Markets Bolstered by Government Uncertainty

While it runs counter to traditional thinking about emerging market equities, the turmoil in Washington appears to be boosting funds tracking these stocks. It’s something that played out last month when currencies in emerging markets plunged on speculation that the Fed would taper the bond buying program, strengthening the dollar and drying up available capital. Now, with the bond-buying program continuing, many see an increased appetite for risk that will push investors into emerging market stocks with the chance for higher yields.

The Financial Times quoted a Societe Generale ($SCGLY) note to its clients as saying: “To the extent that it may affect Fed policy expectations this [the shutdown] may actually feed through as a risk-on signal for global emerging markets (GEM). In addition, this may lead to a downgrade of U.S. macro data in terms of market significance, which helps support the bottom-up approach to GEM while undermining the U.S.-centric top-down theme.”

Emerging Markets Coming Off Strong September

The news that the predicted taper in quantitative easing would be delayed at least a month combined with news of better-than-expected recoveries for economies in Europe, Japan, and the United States made for a rosy September for emerging market ETFs. Since September 1, the iShares MSCI Emerging Markets Indx is up almost 10.5 percent.

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Results for EEM
26 Mar 15 22:08:06
Barcelona! Take me back! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/JUFJoVvAWo http://t.co/k1Lh2gCLTz
Lydia Idem Finkley
26 Mar 15 21:01:29
“@Jonathan_Berman: Emerging market corporate debt (not sovereign). Rarely discussed. HT @JamesGRickards http://t.co/8qKCnI3Ofh”grt pt $EEM
26 Mar 15 20:32:09
I love this trading girl! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/l9JkTCtpHR http://t.co/4YmIu5KMVf
26 Mar 15 18:53:55
I Talk 2 God But It $eem Like He Ignoring Me 2 L'z Up Loyalty & Lawyer Fee$ -Amir Hassan
26 Mar 15 17:07:49
$eem like I had in for the worse from the start.
Jeff Quiggle
26 Mar 15 16:36:07
Danny Jassy
26 Mar 15 16:33:57
NOT ALL EM. MKTS EQUAL: -Asia +422 bps QTD -Lat Am -976 bps QTD Culprit? $DXY via: @GaveKalCapital $EEM $EFA http://t.co/TW4sku4xhv
Top ETF Funds
26 Mar 15 15:55:52
Job Creation Has Picked Up in the United States, But….. http://t.co/cFLjkOz0RS $EEM #ETF #ETFs #Stocks
26 Mar 15 14:16:45
26 Mar 15 13:41:28
Who wins the March Madness of ETFs? $XLE $UUP $VEA $EEM $PWC http://t.co/mb3oRFzgWb
361 Capital
26 Mar 15 13:39:12
XL Sectors most ↓: $XLU worst -0.8%. Top ETFs: Oil, Commodities, Gold, US$. Bottom: Brazil, Russia, Mexico, Bonds, Semis, $EFA, $EEM.
361 Capital
26 Mar 15 13:31:59
$SPX -0.2% as market recovers from ovrnight lows. Bonds -1.5%, Oil +4.5%, Euro/$ -0.8%, $EEM $EFA -1%. $SMH -1% as $SNDK -18% pre-anncs.
26 Mar 15 13:10:17
#TRMX Buenas tardes. Un día muy movido. Bueno a pesar de todo. Sube Petróleo, Mercados Volatiles. Castigo a los $EEM . Mañana será otro día
Logical Invest
26 Mar 15 13:04:53
Our Global Market Rotation Strategy - 10% Return last 3 months $MDY $FEZ $EEM $ILF $EPP ... http://t.co/LQKCtBYv5s http://t.co/IbTBmMc8WN
26 Mar 15 12:23:55
BLOCK TRADE: $EEM 500,000 shares @ $39.43 [15:23:55]
26 Mar 15 12:13:21
The U.S. Dollar's Ripple Effect Felt In Emerging Markets http://t.co/2pbYZVuaFm $USD $EEM $OIL @LPL http://t.co/HO6zxpFlrT
26 Mar 15 11:35:17
$eem like the world🌍 $pin round off money💵💰 the$e day$🔱💯
26 Mar 15 10:20:05
$DJIA Sellin the Mid Day TrndLine break could be a FAKE by last hr $RUT $TF $EEM $INDU $YM $NQ $NDX $QQQ $ES $SPX $SPY $XAU $AAPL $DJIA $EEM
26 Mar 15 09:56:01
Anyone in $VIX this morning should of exited with our SHORTS on $RUT $TF $EEM $INDU $YM $NQ $NDX $QQQ $ES $SPX $SPY $XAU $AAPL $DJIA $EEM
26 Mar 15 09:49:44
So far So good See $RUT $TF $VIX $INDU $YM $NQ $NDX $QQQ $ES $SPX $SPY $XAU $AAPL $DJIA $EEM $NUGT http://t.co/tRJpQKkZIM
26 Mar 15 09:36:34
Weaknes may last 90mins~ Still Expectin EOD Buy Prg push Up $TF $RUT $VIX $INDU $YM $NQ $NDX $QQQ $ES $SPX $SPY $XAU $AAPL $DJIA $EEM $NUGT
26 Mar 15 09:19:13
BLOCK TRADE: $EEM 500,000 shares @ $39.40 [12:19:13]
26 Mar 15 08:48:06
I love this trading girl! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/l9JkTCtpHR http://t.co/v3DwZlasTy
26 Mar 15 08:43:43
BLOCK TRADE: $EEM 950,000 shares @ $39.40 [11:43:42]
Pam Bidwell
26 Mar 15 08:37:09
Trade: 0 $EEM S: 0 0. http://t.co/W5dMTeIPsR
26 Mar 15 08:16:03
BLOCK TRADE: $EEM 537,500 shares @ $39.30 [11:16:03]
Alejandro Aguilar
26 Mar 15 08:07:33
@TheMrDev today... $EEM ...
Alejandro Aguilar
26 Mar 15 08:01:21
@TheMrDev The thing is, you see $EEM going more down or.. going up..
Top ETF Funds
26 Mar 15 07:58:10
Are Investors Warming Up To Russia?.. http://t.co/fxCgNt5El2 $EEM #ETF #ETFs #Stocks
26 Mar 15 07:58:05
India ETFs Stand Out Among Emerging Countries $EEM #Stocks http://t.co/S6DviHMrfm http://t.co/J2FIofoF9t
Top ETF Funds
26 Mar 15 07:57:54
India ETFs Stand Out Among Emerging Countries.. http://t.co/bPsPlC4Y7u $EEM #ETF #ETFs #Stocks
Alejandro Aguilar
26 Mar 15 07:48:35
@TheMrDev so, you see the $eem falling more..?
26 Mar 15 07:43:14
capital flow is slowing down the formation of a quality basket in #EM. $EEM $THD $EPI $EWM $FXI ... some of these are not like the others!
26 Mar 15 07:28:29
26 Mar 15 07:26:45
@Swengaguilar @eugeniodeveze Es correcto A mas baja de $EEM triple alza de $EDZ
26 Mar 15 07:21:03
Fear breakdown in $EEM pisses me off like nothing else. How is this conflict in #Yemen new info, look at my twts this was happen 2mo ago.
26 Mar 15 07:13:16
Nice to know that buy the dip is a viable #market strategy. That said, a buy a dip based completely on #fear, buy #India. $EPI $SPY $EEM
26 Mar 15 07:09:44
"@MexTrader: SI $EEM rompe a la baja los 39.17 se puede complicar el asunto para los Emergentes #TRMX" cross fingers p q se complique $EDZ
26 Mar 15 07:09:23
$EEM Shrts bettr comp to $RUT Held Ovr Ngt Keepin the Plan To Exit & FLIP Some $VIX $INDU $YM $NQ $NDX $QQQ $ES $SPx $TF $IWM $XAU $AAPL
26 Mar 15 07:05:32
SI $EEM rompe a la baja los 39.17 se puede complicar el asunto para los Emergentes #TRMX
26 Mar 15 07:03:48
$EEM not so much... http://t.co/3YqV3ccPFn
26 Mar 15 06:54:50
RT @VolumePrintcess: Big sell prints on $EEM @39.50 3.7 mil shares http://t.co/SSiq3BAuvU
The Stock Whisperer
26 Mar 15 06:53:09
Big sell prints on $EEM @39.50 3.7 mil shares http://t.co/SSiq3BAuvU
26 Mar 15 06:48:45
RT @alsabogal: $ has weakened last few days and $EEM has seen no benefit...odd.
Al Sabogal
26 Mar 15 06:45:51
$ has weakened last few days and $EEM has seen no benefit...odd.
26 Mar 15 06:23:06
Barcelona! Take me back! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/JUFJoVvAWo http://t.co/WtuAriHLw5
Top ETF Funds
26 Mar 15 03:52:57
What Investors Think About Brazil Political & Currency Risk.. http://t.co/JBvCnriFkv $EEM #ETF #ETFs #Stocks
Top ETF Funds
26 Mar 15 03:52:40
Dollar Tantrum Ties The Fed's Hands: Morgan Stanley.. http://t.co/qLgxZqcUGw $EEM #ETF #ETFs #Stocks
26 Mar 15 02:32:02
$UUP $SPY $EEM: Dollar Tantrum Ties The Fed's Hands: Morgan Stanley: http://t.co/i8tn9pH0Mq
Shuli Ren
26 Mar 15 02:28:29
#FOMC can't care less for $EEM, but dollar tantrum ties its hands: Morgan Stanley http://t.co/2KymfajJK2 via @barronsonline $UUP $SPY
By  +Follow October 4, 2013 10:53AM



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