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Turkey, China Stocks Drag Down Emerging Markets Again

By  +Follow December 19, 2013 1:28PM
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The iShares Emerging Markets Index ETF (EEM) dropped over 1.5 percent on Thursday, showing losses the day after the long-awaited announcement of the tapering of quantitative easing.

However, the downward pressure on global stock markets appears to be driven by factors other than concerns of the Federal Reserve’s policy making. In a story similar to that on Tuesday, it appears as though plunging equities markets in Turkey and China are the greater causes of Thursday’s decline.

Fed Tapers Bond-Buying Program

The decision to roll back the rate at which the Fed would purchase bonds by $10 billion a month to $75 billion a month was announced by Ben Bernanke. He also reassured markets that interest rates would stay at or near zero into the future, even beyond the point where unemployment fell below 6.5 percent.

This news about interest rates, paired with general optimism based on a healthy American economy, is generally being cited as one of the primary factors driving the major spike experienced by American stock markets immediately after Bernanke’s announcement. And EEM joined in that rally, spiking 2 percent in less than 10 minutes after the 2 pm announcement and providing further evidence that the taper announcement is most likely not creating a great deal of downward pressure on global markets.

Turkey’s Saga Continues

The corruption probe in Turkey took on a new tenor Wednesday as 10 police commanders leading the investigation were suspended. News out of Turkey now indicates that the corruption saga could be part of a larger political struggle between an Islamist movement led by cleric Fethullah Gulen, who currently resides in Pennsylvania, and forces within the government including Prime Minister Recep Tayyip Erdogan. The movement is believed to have allies in the police and judiciary, prompting the backlash Wednesday by Erdogan.

Regardless of what lies at the source of the political struggle, it continues to hurt Turkish equities. The iShares MSCI Turkey Index ETF (TUR) fell almost 4.5 percent on Thursday, making losses since Tuesday’s dawn raids that led to the arrest of the sons of three cabinet ministers over 8.5 percent.

China Stocks Decline for Eighth Straight Day

Chinese equities continued a losing streak that appears to have the potential to last two straight weeks as major indicies declined for the eighth consecutive day. China ETFs were down accordingly, with the iShares FTSE China 25 Index ETF (FXI) off almost 2 percent and the iShares MSCI China Index Fund (MCHI) declining over 1.75 percent.

Driving the losses are concerns that China’s crackdown on credit markets will hold back economic growth as the cost of funding increases.

“Liquidity is still tight at the end of the year and there’s still downward pressure due to new stock supply in January,” said Zhang Haidong, an analyst at Tebon Securities Co. in Shanghai. “Until we see concrete evidence that the economy is going to be strong again, the market will remain weak.”

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
natetrades
25 Oct 14 11:34:09
$EEM ping pong off 36 and 45 https://t.co/KGUy4kyqkS via http://t.co/eJgBzSEGxE
Me_Sean
25 Oct 14 09:57:57
EMERGING MARKET EARNINGS: In EM, 20% companies have reported and the aggregate yoy EPS growth is around 7%. $spy $eem $ewz $ewzs $eww $study
tradewithjoe
25 Oct 14 07:44:09
RT @ETFdb: Check out this weeks ETF Scorecard> http://t.co/OBbiJ2vmyO $SPY $IWM $QQQ $GLD $EEM @sbojinov @fabiancapital @ETFGodfather @Chri…
Hedge House Kuwait
25 Oct 14 06:59:53
#Cross Economies – Clear strength in the devp. among emerging markets $EEM
Hedge House Kuwait
25 Oct 14 06:59:31
#Cross Economies ETFs week perform- Euro $FEZ 2.72% Japan $EWJ +2.93% US $SPY +4.2% Emerging $EEM +0.74%
moderneconomist.com
25 Oct 14 06:17:20
RT @harmongreg: $SPY Trends and Influencers October 25, 2014 - Dragonfly Capital http://t.co/HUWsL8ZnJM $iwm $qqq $tlt $vxx $uup $uso $gld …
Matt K
25 Oct 14 06:12:27
RT @harmongreg: $SPY Trends and Influencers October 25, 2014 - Dragonfly Capital http://t.co/HUWsL8ZnJM $iwm $qqq $tlt $vxx $uup $uso $gld …
kenr0966
25 Oct 14 06:11:46
RT @harmongreg: $SPY Trends and Influencers October 25, 2014 - Dragonfly Capital http://t.co/HUWsL8ZnJM $iwm $qqq $tlt $vxx $uup $uso $gld …
Greg Harmon, CMT
25 Oct 14 06:11:19
$SPY Trends and Influencers October 25, 2014 - Dragonfly Capital http://t.co/HUWsL8ZnJM $iwm $qqq $tlt $vxx $uup $uso $gld $eem $fxi
Stock Relay
25 Oct 14 01:37:42
stockblaster14: Stock Alerts: Emrg Mkts Index MSCI Ishares (EEM) 41.02 $EEM http://t.co/HeoARlvUHK
Stock Relay
24 Oct 14 22:02:40
wininstocks2014: Stock Charts: EEM 3.38 Stock Charts $EEM Electricite et Eaux de http://t.co/IOf75BoM5k
wininstocks2014
24 Oct 14 22:01:24
EEM 3.38 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 10/25/2014 00:01:23 EEM Stock http://t.co/czAvXcJPbo
Vinod K. Shadija
24 Oct 14 20:50:48
RT @allstarcharts: emerging markets have been such a waste of time and money for so long. I don't envy anyone who got stuck in that trade $…
$EEM
24 Oct 14 20:48:44
Listen to $EEM x WATCH EM by TSMGJBFMG 5100 #np on #SoundCloud http://t.co/rTAjBpbI9O
Debashis Basu
24 Oct 14 20:18:47
RT @allstarcharts: emerging markets have been such a waste of time and money for so long. I don't envy anyone who got stuck in that trade $…
PatoNet 
24 Oct 14 19:43:04
$EEM quiere explotar, pero tendrá muchos problemas hasta llegar a 42. De ahí puede explotar. http://t.co/6aAHIJmKdm
Mike Zaccardi, CMT
24 Oct 14 19:31:54
US large cap stocks outperform again this week: $SPY +4.2% $IWM +3.3% $EFA +2.6% $EEM +0.7% $AGG -0.2%
Claus
24 Oct 14 18:32:35
$EEM looking bear flaggy, consolidating the breakdown < weekly MAs https://t.co/GSAuLhwswz
BetterBeta Trends
24 Oct 14 18:06:10
No longs. Shorts: $EEM $EWZ $FXE. No new positions for Monday. $GLD getting close to short signal after bumping into 120 level.
Jeff Quiggle
24 Oct 14 16:50:18
$MACRO > $TLT $GLD $QQQ $IWM $SPY $JNK $FXI $EEM $FEX $USO Yesterday > $TLT $GLD $IWM $QQQ $FXI $JNK $SPY $EEM $FEZ $USO
Chasing Stars
24 Oct 14 15:29:00
$GGAL % Change Click Here: http://t.co/EbNC6NgUf8 Also See: $EWRS $RIG $EEM $VOIS ~
J.C. Parets
24 Oct 14 15:13:16
emerging markets have been such a waste of time and money for so long. I don't envy anyone who got stuck in that trade $EEM
花田清輝
24 Oct 14 15:12:45
RT @sobata416: the $USD likes its emerging markets martini shaken, not stirred: source: @M_McDonough $EEM http://t.co/FlHrR8Hnz0
Nick Nasad
24 Oct 14 15:00:41
RT @sobata416: the $USD likes its emerging markets martini shaken, not stirred: source: @M_McDonough $EEM http://t.co/FlHrR8Hnz0
Seeking Alpha
24 Oct 14 15:00:04
No Market Is An Island http://t.co/v5rr05lGU3 $EEM $VWO $TIP $EFA $VB $EDC $VEA $VO $VBR $EES $VBK $VTV $VUG $EDZ $SCHA $SCHE $VOE $MIDU
Huang Yu
24 Oct 14 14:40:24
RT @sobata416: the $USD likes its emerging markets martini shaken, not stirred: source: @M_McDonough $EEM http://t.co/FlHrR8Hnz0
Lagos Capital
24 Oct 14 14:32:44
RT @sobata416: the $USD likes its emerging markets martini shaken, not stirred: source: @M_McDonough $EEM http://t.co/FlHrR8Hnz0
$hane Obata
24 Oct 14 14:31:12
the $USD likes its emerging markets martini shaken, not stirred: source: @M_McDonough $EEM http://t.co/FlHrR8Hnz0
Seeking Alpha
24 Oct 14 14:21:29
No Market Is An Island http://t.co/iDXZz1WVLj $EEM $VWO $TIP $EFA $VB $EDC $VEA $VO $VBR $EES $VBK $VTV $VUG $EDZ $SCHA $SCHE $VOE $MIDU
Investors Hangout
24 Oct 14 13:52:17
$FNV.TO Tick Click Here: http://t.co/pixvqY1Kwq Also See: $EEM $FVI.TO $T $DXJ ~
Chasing Stars
24 Oct 14 11:27:23
$EEM Quotes Click Here: http://t.co/M5NyYHIOer Also See: $VZ $XLB $X $XLV ~
Carson Dahlberg, CMT
24 Oct 14 11:21:46
$EEM #volatility index $VXEEM will likely be trading in a lower range http://t.co/Gr0CAaPSpI
Stock Forums
24 Oct 14 11:16:31
$EEM Day High Click Here: http://t.co/wlRGBh7sVU Also See: $FNMA $TLT $QCOM $MLNX ~
Investors Hangout
24 Oct 14 11:13:11
$EEM Change Click Here: http://t.co/IkF2B0eRyS Also See: $CSX $MNST $GWPC $EXK ~
Investors Hangout
24 Oct 14 11:09:00
$EEM EOD Data Click Here: http://t.co/S9bLr7gtjU Also See: $SQQQ $HALB $SEGI $XLK ~
Kevin Brent Cook
24 Oct 14 10:47:51
"@fabiancapital: Beaten down $EEM getting lift today $RSX $EWZ My latest on @seeitmarket on key technical level http://t.co/KGKQgNqhHK $VWO"
Stoyan Bojinov
24 Oct 14 09:42:37
RT @ETFdb: Check out this weeks ETF Scorecard> http://t.co/OBbiJ2vmyO $SPY $IWM $QQQ $GLD $EEM @sbojinov @fabiancapital @ETFGodfather @Chri…
FMD Capital
24 Oct 14 09:41:16
RT @ETFdb: Check out this weeks ETF Scorecard> http://t.co/OBbiJ2vmyO $SPY $IWM $QQQ $GLD $EEM @sbojinov @fabiancapital @ETFGodfather @Chri…
ETF Database
24 Oct 14 09:40:17
Check out this weeks ETF Scorecard> http://t.co/OBbiJ2vmyO $SPY $IWM $QQQ $GLD $EEM @sbojinov @fabiancapital @ETFGodfather @ChristianMagoon
BlockTradeAlert
24 Oct 14 08:51:56
BLOCK TRADE: $EEM 700,000 shares @ $41.18 [11:51:56]
Al Sabogal
24 Oct 14 08:00:57
$BK & $EEM acting well...posted buying calls yest
Dimitra DeFotis
24 Oct 14 08:00:00
Emerging Markets Today: Brazil Jumps, Russia Lower http://t.co/tVcipnu7AX via @barronsonline $PBR $EEM $ILF
Zubeyr Kamil Açıksar
24 Oct 14 07:40:31
RT @ETFdb: $EWZ shinning bright among other $EEM 's .... $FXI $RSX creeping higher
ETF Database
24 Oct 14 07:40:09
$EWZ shinning bright among other $EEM 's .... $FXI $RSX creeping higher
Stock Forums
24 Oct 14 07:38:30
$CORN 52Wk High Click Here: http://t.co/g8ONEtf7XT Also See: $HVU.TO $EEM $ZAZA $VII ~
TV_Trading Ideas
24 Oct 14 07:08:27
I can't find any trend $EEM http://t.co/pE3Sd8Wxcn
Juan-Manuel Renero
24 Oct 14 05:41:58
RT @PugTrader: $EEM not out of the woods IMHO with an enigmatic formation and large volume these days #FTR1 $EDC $EDZ http://t.co/mh6GZA1…
Stock Forums
24 Oct 14 05:35:15
$BIIB Ask Size Click Here: http://t.co/mXlKeMo8j1 Also See: $EEM $XHB $FB $EFA ~
Rareview Macro
24 Oct 14 04:16:02
China home prices fell MoM in 69 out of 70 cities; existing home prices down MoM in ALL 70; is that a bottom? $FXI $EEM #ironore #copper
Stock Forums
24 Oct 14 03:51:16
$APA E.P.S. Click Here: http://t.co/gEtcgBVegb Also See: $AEMD $EEM $NSPH $ZSL ~
				
				
By  +Follow December 19, 2013 1:28PM
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