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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
Stock_Tracker
18 Sep 14 02:47:50
Emrg Mkts Index MSCI Ishares (EEM) 43.73 $EEM Look for Shares of iShares MSCI Emerging Markets Index Fund/Unit http://t.co/FXt4GwG6Uw
inBestia.com
18 Sep 14 01:46:36
RT @antonipedra: El retorno del dólar y sus consecuencias http://t.co/kJxAziH0Z8 via @inBestia $DXY #US #forex #dolar $EEM $DAX $USO $GLD …
Seeking Alpha
17 Sep 14 23:52:55
U.S. Stocks: All Better Now? http://t.co/55Byn6Rakk $DIA $EEM $EFA $FXI $IWM $SPY $MDY
chartguy89
17 Sep 14 22:47:40
EEM 3.55 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 09/18/2014 00:47:47 EEM Stock http://t.co/los9S9l4Zg
Antonio Pedra
17 Sep 14 22:14:45
El retorno del dólar y sus consecuencias http://t.co/kJxAziH0Z8 via @inBestia $DXY #US #forex #dolar $EEM $DAX $USO $GLD $JO $BAL $JJC
Mike Zaccardi, CMT
17 Sep 14 20:30:37
Awesome false breakout in $VWO $EEM .. went on to have worst 6 day stretch since 2012 http://t.co/zIHsb7scbn
Penny Millionare
17 Sep 14 19:56:59
RT @rosnerstocks: $MNVN Stock Message Board Click Here: http://t.co/DR0JN9Ye33 Also See: $MMM $EEM $TWTR $INCC ~
Prestigious 1
17 Sep 14 19:32:49
@_shinelx it fits you! 😃.. Sup mayne ?? $eem$ like you've been touring so you dont even remember me
Rosner Stocks
17 Sep 14 19:07:24
$AVGO Dividend Click Here: http://t.co/ppPylR2TH8 Also See: $ACI $LVS $IEF $EEM ~
Lagos Capital
17 Sep 14 18:37:39
RT @optionsleuth: $EEM - http://t.co/5kiVFYZjtL -Emerging Markets tracking TLT closely @pensionpartners
Optionsleuth
17 Sep 14 18:36:46
$EEM - http://t.co/5kiVFYZjtL -Emerging Markets tracking TLT closely @pensionpartners
OTPicks.com
17 Sep 14 17:44:45
http://t.co/hjgLwIcNgz DennyT: EEM Financials $EEM $ZNGA $AMBS $GRCU $MBLY Buy: DennyT http://t.co/Wivqj4ISVr http://t.co/hjgLwIcNgz
Mike Zaccardi, CMT
17 Sep 14 17:13:30
@seeitmarket @TheFibDoctor Yep. Pretty impressivee that $EEM was +21.0% vs $SPY +9.6% while $UUP +4.55% since spring through EEM peak
See It Market
17 Sep 14 17:12:25
@MikeZaccardi @TheFibDoctor Looks like 43/44 imp support area for $EEM. Thx for ur thoughts Mike! Will be interesting to watch into next wk.
Chasing Stars
17 Sep 14 16:51:08
$TEMN Market Cap Click Here: http://t.co/W4AVoPLPxr Also See: $TZA $CNCE $EEM $VTI ~
Mike Zaccardi, CMT
17 Sep 14 16:30:56
@TheFibDoctor @seeitmarket $EEM did well, even on a relative basis, until the last point on DXY
Jeff Quiggle
17 Sep 14 15:50:29
$MACRO > $QQQ $SPY $FEZ $FXI $IWM $EEM $USO $TLT $JNK $GLD Yesterday > $QQQ $SPY $FXI $IWM $FEZ $EEM $TLT $USO $JNK $GLD
Lagos Capital
17 Sep 14 15:42:37
RT @seeitmarket: New Post -- "Chart of the Day: US Dollar Strength vs Emerging Markets" http://t.co/5BGkNM575z by @andrewnyquist $EEM $SPY …
See It Market
17 Sep 14 15:37:21
New Post -- "Chart of the Day: US Dollar Strength vs Emerging Markets" http://t.co/5BGkNM575z by @andrewnyquist $EEM $SPY $DX_F $STUDY
Rosner Stocks
17 Sep 14 15:29:16
$MNVN Stock Message Board Click Here: http://t.co/DR0JN9Ye33 Also See: $MMM $EEM $TWTR $INCC ~
Andrew Nyquist
17 Sep 14 15:16:11
My latest post on @seeitmarket: "Chart of the Day: US Dollar Strength Hits Emerging Markets" http://t.co/YutA8RwaVI $EEM $SPY $UUP $DX_F
Will Hassell
17 Sep 14 14:32:42
Had an up day of +.10% or +$15.04, worst performer was $EEM -.93%, best was $UA +1.98% #performance #transparency
Stephen Weitzel CFP®
17 Sep 14 14:18:32
@timseymour is the lack of EM follow thru higher today post Fed announcement discouraging to this thesis? $EEM $FXI $ILF $EPI
Anthony Fernandes
17 Sep 14 14:10:35
valuewalk In EM, Beware Commodity Riches Without Good Policy http://t.co/FrLKOl5dCq $EEM http://t.co/H8xGRoxWsy
361 Capital
17 Sep 14 14:05:29
Thorns in the Market Today: $UUP $TLT $GLD $EWA $EEM $RSX $SNE $RAX $ADBE $GIS $OI http://t.co/R0GCK513S8
Investors Hangout
17 Sep 14 14:00:31
$IDGC Ask Click Here: http://t.co/uRxyxzxb4m Also See: $BID $SUNE $AMD $EEM ~
Rosner Stocks
17 Sep 14 13:57:23
$HHSE Volume Click Here: http://t.co/ddaWlTyUn7 Also See: $UVXY $CARA $NFLX $EEM ~
Greg Harmon, CMT
17 Sep 14 13:43:10
$EEM Dark Cloud Cover, bodes lower, 43/42.54/41 support, resistance 44/45/48 http://t.co/fENLWqpYlC
REJ
17 Sep 14 13:33:06
RT @TheChartress: Combined message of 10-yr, gold, dollar & $EEM post-FOMC suggest that the initial dovish interpretation of today's events…
Top ETF Funds
17 Sep 14 13:23:07
Global fund managers drop US equity allocations to mid 2012 and 2013 lows.. http://t.co/4B2xRG8j8q $EEM #ETF #ETFs #Stocks
Top ETF Funds
17 Sep 14 13:22:50
Emerging Markets the Canary In The Coal Mine?.. http://t.co/TZskUeBysr $EEM #ETF #ETFs #Stocks
Top ETF Funds
17 Sep 14 13:22:34
As Fed Talks: Emerging Markets Are Investing Opportunity, Oppenheimer Says.. http://t.co/ens736IFrE $EEM #ETF #ETFs #Stocks
Top ETF Funds
17 Sep 14 13:22:17
Fed Reassures Emerging Markets.. http://t.co/PowJ1LQcCu $EEM #ETF #ETFs #Stocks
Will Hassell
17 Sep 14 13:12:58
@CNBCFastMoney @timseymour you had $EEM as your final trade last week and to buy it after the FED meeting, you still like this? #askfast
manonfire666
17 Sep 14 13:11:43
RT @TheChartress: Combined message of 10-yr, gold, dollar & $EEM post-FOMC suggest that the initial dovish interpretation of today's events…
Abigail Doolittle
17 Sep 14 13:04:31
Combined message of 10-yr, gold, dollar & $EEM post-FOMC suggest that the initial dovish interpretation of today's events may soon change
ValueWalk
17 Sep 14 12:56:53
In EM, Beware Commodity Riches Without Good Policy http://t.co/anZ28ovBxY $EEM http://t.co/gfNMnSDsVu
Financial Tailor
17 Sep 14 12:51:05
$EEM get ready for the big payback. https://t.co/aZas2IMKnr
Financial Tailor
17 Sep 14 12:46:03
Code red in emerging markets. The stronger the dollar gets the harder it is for EM businesses to payback dollar-denominated loans. $EEM
BlockTradeAlert
17 Sep 14 12:45:23
BLOCK TRADE: $EEM 1,800,000 shares @ $43.77 [15:45:22]
Kevin Logan
17 Sep 14 12:43:17
$EEM and $FXI closing near lows of day. #emerge
Anıl Dogru
17 Sep 14 12:36:58
$TUR -1.58% $EEM -0.61%
Investors Hangout
17 Sep 14 12:28:39
$COO Ex-Div Date Click Here: http://t.co/fXTfpR2PA2 Also See: $BITA $EEM $KGC $GWPH ~
Dimitra DeFotis
17 Sep 14 12:24:31
Fed Reassures Emerging Markets, http://t.co/XAG7qXiyjg via @barronsonline $EWZ $TUR $EEM $BKF $RSX
Anıl Dogru
17 Sep 14 12:15:28
$TUR -0.56% $EEM +0.24% ( eem eksiydi açıklam oncesi TUR -1% di )
BlockTradeAlert
17 Sep 14 12:08:28
BLOCK TRADE: $EEM 500,000 shares @ $44.21 [15:08:28]
BlockTradeAlert
17 Sep 14 12:07:43
BLOCK TRADE: $EEM 500,000 shares @ $44.20 [15:07:41]
Zubeyr Kamil Açıksar
17 Sep 14 11:56:58
RT @DeFotis: As Fed Talks: Emerging Market Is Investing Opportunity @OppFunds CIO @KrishnaMemani tells @tomkeene http://t.co/U2R9oRB4pX $E…
OppenheimerFunds
17 Sep 14 11:56:21
RT @DeFotis: As Fed Talks: Emerging Market Is Investing Opportunity @OppFunds CIO @KrishnaMemani tells @tomkeene http://t.co/U2R9oRB4pX $E…
BlockTradeAlert
17 Sep 14 11:24:18
BLOCK TRADE: $EEM 1,150,000 shares @ $44.03 [14:24:18]
				
				
By  +Follow October 4, 2013 10:53AM
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