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Emerging Market ETFs Bounce on Government Shutdown

By  +Follow October 4, 2013 10:53AM
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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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for EEM
Terry Kinder
23 Nov 14 11:45:13
RT @ETFdb: Check out this week's ETF Scorecard >> http://t.co/ZypyLvDgm1 // $SPY $EFA $EEM $IWM $QQQ $GLD @sbojinov @fabiancapital @Christi…
Extreme Stocks
23 Nov 14 10:39:29
lookn4wins: EEM 3.19 Stock Charts $EEM Electricite et Eaux de http://t.co/wECcJ0LhQe
iHangout
23 Nov 14 10:34:08
lookn4wins: Cheeky's Board!: EEM 3.19 Stock Charts $EEM Electricite et Eaux de http://t.co/wlTcwX4wcW
MadagascarBot
23 Nov 14 10:33:19
RT @lookn4wins: EEM 3.19 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Any opinions on EEM? Please reply to this p http://t.co/…
lookn4wins
23 Nov 14 10:32:20
EEM 3.19 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Any opinions on EEM? Please reply to this p http://t.co/7hTSMXTgse
Muathe
23 Nov 14 10:06:29
[VIDEO REPOST] Weekend Market Analysis 11/23/2014 [PUBLIC] $XLE $IWM $GDX $XLF $EEM $EWZ $VXX $FXI $TZA $JNUG $QQQ http://t.co/ZAWpLhAP9z
) * 和平
23 Nov 14 08:01:36
thi$ intanet youth generation i$ $o much different, dont wanna generalize but they $eem mo $elfi$h and di$re$pectful? humanity is doomed /o/
Mitch
23 Nov 14 07:45:45
China ready to cut rates again? http://t.co/kPhU6oarof http://t.co/WQF0hHN8A8 $EEM $FXI $EWZ
$NAPCHATJE$$EJAME$®
23 Nov 14 06:31:24
@fuckgcddess yeah! People $eem to love that one.
Chartrambler
23 Nov 14 04:32:01
RT @Tradingchannels: Weekend charts: $SPX $DJIA $RUT $XAU $WTIC $CL_F $GBPUSD $EEM http://t.co/g7jk45DVmh
Bouraq
23 Nov 14 03:15:02
Weekend charts: $SPX $DJIA $RUT $XAU $WTIC $CL_F $GBPUSD $EEM http://t.co/g7jk45DVmh
MadagascarBot
22 Nov 14 22:20:14
RT @lookn4wins: EEM 3.19 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Any opinions on EEM? Please reply to this p http://t.co/…
lookn4wins
22 Nov 14 22:19:32
EEM 3.19 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Any opinions on EEM? Please reply to this p http://t.co/mfEOU9IKbM
Edward Good
22 Nov 14 21:42:06
RT @paulwoll: Most interesting thing from China lowered rates seems to be the juice it gave for Emerging Markets... $EEM
Technical Traders
22 Nov 14 17:29:39
$EEM issued buy signal levels to watch . http://t.co/F23oaVcoGX #SR #sniper
TRADER1970
22 Nov 14 17:29:39
$EEM issued buy signal levels to watch . http://t.co/b4xB8PI04s #SR #sniper
alex demache
22 Nov 14 17:22:36
RT @harmongreg: $SPY Trends and Influencers November 22, 2014 - Dragonfly Capital http://t.co/zeDejU1iql $IWM $QQQ $VXX $TLT $EEM $GLD $USO…
Befree
22 Nov 14 15:56:51
RT @paulwoll: Most interesting thing from China lowered rates seems to be the juice it gave for Emerging Markets... $EEM
Woll Street
22 Nov 14 15:50:11
Most interesting thing from China lowered rates seems to be the juice it gave for Emerging Markets... $EEM
PennyStock Zone
22 Nov 14 14:28:43
http://t.co/37mHH9cdhB <-- 2 stocks trading books: 1 entertaining and 1 educational! Both awesome! $TE $EEM $BIND $DENN $KR
Charles Z
22 Nov 14 14:25:18
Ray Dalio's Bridgewater Associates 3Q: Increasing Emerging Markets $VWO $EEM by $80M (1%), $200M (5%), reducing $SPY by $350M (9%).
BetterBeta Trading
22 Nov 14 11:33:56
$EEM powered past some important levels - above the 20, 50 & 200 MA and the 44 level. Will it hold? http://t.co/yEzhZSV57J
PennyStock Zone
22 Nov 14 09:42:39
http://t.co/37mHH9cdhB <-- 2 stocks trading books: 1 entertaining and 1 educational! Both awesome! $TE $EEM $BIND $DENN $KR
Jeremy Mullin
22 Nov 14 09:19:08
RT @MikeZaccardi: YTD TR: $VTI +12.4% $SPY +13.5% $IWM +2.0% $EFA -2.6% $EEM +2.4% $AGG +5.2%
G. Thomas Lackey Jr
22 Nov 14 09:06:15
"@harmongreg: $SPY Trends and Influencers November 22, 2014 - Dragonfly Capital http://t.co/0gDZxTEz6F $IWM $QQQ $VXX $TLT $EEM $GLD $USO "
Greg Harmon, CMT
22 Nov 14 08:49:21
$SPY Trends and Influencers November 22, 2014 - Dragonfly Capital http://t.co/zeDejU1iql $IWM $QQQ $VXX $TLT $EEM $GLD $USO $UUP $SSEC $VIX
VirginieJacobergerL
22 Nov 14 08:16:26
RT @BRICBreaker: Joaquim Levy would be aa better Brazil FinMin than Trabuco. Asset mgr, ex-IMF. A truly global nomad. He's my pick now. $EW…
Hedge House Kuwait
22 Nov 14 06:50:56
#Cross Economies ETFs – strength clearly emerging in Euro $FEZ, and volatile breakout in the $EEM.
Hedge House Kuwait
22 Nov 14 06:50:36
#Cross Economies ETFs week perform- Euro $FEZ +3.32% Japan $EWJ (1.15%) US $SPY +1.19% Emerging $EEM +2.41%
Mike Zaccardi, CMT
22 Nov 14 06:49:21
YTD TR: $VTI +12.4% $SPY +13.5% $IWM +2.0% $EFA -2.6% $EEM +2.4% $AGG +5.2%
$EEM
22 Nov 14 06:41:28
Listen to $EEM x WATCH EM by TSMGJBFMG 5100 #np on #SoundCloud http://t.co/30U8PaSIbl tune to watch em http://t.co/JiTbsKvtXI
$EEM
22 Nov 14 06:40:50
Listen to $EEM x WATCH EM by TSMGJBFMG 5100 #np on #SoundCloud http://t.co/30U8PaSIbl
$EEM
22 Nov 14 06:19:19
Listen to $EEM x WATCH EM by TSMGJBFMG 5100 #np on #SoundCloud http://t.co/30U8PaSIbl go tune $eem.x Watch em http://t.co/7vo0ilvu87
PennyStock Zone
22 Nov 14 05:30:32
http://t.co/37mHH9cdhB <-- 2 stocks trading books: 1 entertaining and 1 educational! Both awesome! $TE $EEM $BIND $DENN $KR
Pöpülár Pláñét®
22 Nov 14 01:59:38
Check out this week's ETF Scorecard >> http://t.co/XIpZXJDxC6 // $SPY $EFA $EEM $IWM $QQQ $GLD @sbojinov @fabiancapital @ChristianMagoon
SwingTradeBot
21 Nov 14 18:31:19
seeing a few emerging market ETFs rising above 50-day moving averages - $EWZ $EEM $VWO $EEMV $IEMG http://t.co/2yq5o6xtZW
Hedge AccordingLy
21 Nov 14 16:28:18
$FXI $EEM “@Dvolatility: What China's Rate Cut Means For Global Economy http://t.co/nty3HJn5lN #China”
$EEM
21 Nov 14 16:24:50
Listen to $EEM x WATCH EM by TSMGJBFMG 5100 #np on #SoundCloud https://t.co/2yoKtgR4OZ go tune
ShortStockVolume.com
21 Nov 14 14:32:06
Top Shorted Stocks 11/21/14... 14. $AMX 71.30% 15. $XLF 70.63% 16. $EWT 70.62% 17. $JNS 70.56% 18. $EEM 70.00% 19. $USO 69.32%...
ShortStockVolume.com
21 Nov 14 14:32:03
Top Shorted Stocks 11/21/14... 16. $EWT 70.62% 17. $JNS 70.56% 18. $EEM 70.00%... http://t.co/NAclvFr0qe
JCPR
21 Nov 14 14:15:21
RT @ETFdb: Check out this week's ETF Scorecard >> http://t.co/ZypyLvDgm1 // $SPY $EFA $EEM $IWM $QQQ $GLD @sbojinov @fabiancapital @Christi…
Large Void Bot
21 Nov 14 14:00:40
Popular: $ONVO, $JKS, $EJ, $EEM, $AMTD, $STT, $OZRK, $ENTA, $DHI, $TSL, $MWE, $BBT, $TLT, $SYY, $WAIR, $ANSS, $EPB
Matthew O'Brien
21 Nov 14 13:50:37
Are we witnessing the end of China’s economic miracle? http://t.co/aGxiACUDp2 $vwo $eem
TrendLizard
21 Nov 14 13:37:15
$EEM - big up day, corrective recovery not yet complete http://t.co/i5G9N8vyk7 http://t.co/Nd0opzBe4a
361 Capital
21 Nov 14 13:29:17
$SPX +0.5% to new record high as China cuts rates, ECB's Draghi talks QE, Euro -1.2%, Euro Equities +2%, $EEM +3%. All US XL sectors up.
Tracey Ryniec
21 Nov 14 13:13:37
"@EricDutram: China ETFs like $FXI up 4% after rate cut, boosting EM ETFs like $VWO and $EEM. Real winner was brazil, $EWZ up 7% on fri"
Al Sabogal
21 Nov 14 13:09:07
China has so much firepower that if they are serious about adding liquidity this c/b just the tip of the iceberg...great for $EEM trade
Eric Dutram
21 Nov 14 13:00:05
China ETFs like $FXI up close to 4% after rate cut, boosting EM ETFs like $VWO and $EEM. but real winner today was brazil, $EWZ up 7% on fri
SJD10304
21 Nov 14 12:50:55
What didn't fade today? $DEM and $EEM. Is the time to "emerge" FINALLY here? #spx
Day Trade Alerts
21 Nov 14 12:34:14
RT @bangersnpip: @bangersnpip $EEM too
				
				
By  +Follow October 4, 2013 10:53AM
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