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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
Jeff Quiggle
25 Jan 15 16:25:43
$MACRO $UUP $TLT $GLD $FXI $EEM $VXX $QQQ $IWM $SPY $JNK $FEZ $USO Yesterday $UUP $TLT $GLD $FXI $VXX $EEM $JNK $IWM $SPY $QQQ $FEZ $USO
Phil Martin
25 Jan 15 15:52:14
$EEM http://t.co/ZaboWTjSHP
Woll Street
25 Jan 15 15:50:14
RT @andrewnyquist: $EEM $SPY Ratio - Emerging Markets outperforming S&P 500 thus far in 2015. http://t.co/7OTtxo1KY4
See It Market
25 Jan 15 15:48:00
RT @andrewnyquist: $EEM $SPY Ratio - Emerging Markets outperforming S&P 500 thus far in 2015. http://t.co/7OTtxo1KY4
Drew-Lo #7
25 Jan 15 14:42:38
Yeahh, I'm On A Bad Trip, & I Can't $eem To Find M**** 💶😎🙌 haha
Ray Buckner, IAR
25 Jan 15 12:31:05
RT @StockTwits: After the first 3 weeks of 2015, the S&P 500 is flat. Emerging markets, however, are up almost 4% -> http://t.co/Z3GJcSUsD…
Dan Neagoy
25 Jan 15 12:28:37
RT @seeitmarket: Will Central Bank Policies Lead Investors To The Punch Bowl… Again? http://t.co/VG4dyCzbXm by @ThetaTrend | $SPY $IWM $IYR…
Dave Fry
25 Jan 15 12:04:27
$XSOE $EEM This new ETF wants to change your mind about emerging-markets stocks http://t.co/4rKgNBaZER
Woll Street
25 Jan 15 11:46:30
https://t.co/oK7ZDnSove $EEM Emerging Markets bullish weekly cross of down TL. Green line backtest may be swingable long or close > 41
HundooBoy
25 Jan 15 10:57:03
New Single We $eem Em looking Drop At 3:00 So Please Go Check It Out , On SoundCloud stoners_world . like & listen
Kate
25 Jan 15 10:53:09
RT @seeitmarket: Will Central Bank Policies Lead Investors To The Punch Bowl… Again? http://t.co/VG4dyCzbXm by @ThetaTrend | $SPY $IWM $IYR…
PolgarStocks
25 Jan 15 10:52:06
$VAW Investor Opinions Updated Sunday, January 25, 2015 1:07:00 PM $EEM $RSX $BABA $XIV http://t.co/AvuHPlMAtn
Befree
25 Jan 15 10:23:24
RT @seeitmarket: Will Central Bank Policies Lead Investors To The Punch Bowl… Again? http://t.co/VG4dyCzbXm by @ThetaTrend | $SPY $IWM $IYR…
See It Market
25 Jan 15 10:13:55
Will Central Bank Policies Lead Investors To The Punch Bowl… Again? http://t.co/VG4dyCzbXm by @ThetaTrend | $SPY $IWM $IYR $EEM $HEDJ
PolgarStocks
25 Jan 15 09:51:21
$T Stock Price Updated Sunday, January 25, 2015 12:07:02 PM $ABBV $IYR $EEM $DAL http://t.co/8owE8RNQ2C
Langan Stocks
25 Jan 15 09:08:49
$XLB Filings Updated Sunday, January 25, 2015 12:03:12 PM $UPS $TSLA $JAZZ $EEM http://t.co/bjdmI1jUct
Langan Stocks
25 Jan 15 08:08:11
$HYSR Company Info Updated Sunday, January 25, 2015 11:03:13 AM $EEM $IMSC $COH $EZU http://t.co/Shpa5buOQK
Craig Hammerberg
25 Jan 15 07:56:52
RT @abnormalreturns: Sunday links: $AAPL earnings peek, unchallenged overconfidence and 'peak economist.' http://t.co/Bj94sHoEuf $GLD $FXE …
PolgarStocks
25 Jan 15 07:50:15
$HD Percent Change Updated Sunday, January 25, 2015 10:07:02 AM $MELY $IEF $WFC $EEM http://t.co/Yh10GJDYOL
Nereida Diesen
25 Jan 15 07:10:25
Sunday links: $AAPL earnings peek, unchallenged overconfidence and 'peak economist.' http://t.co/kVeFqFFqyy $GLD $FXE $BOX $QQQ $EEM $AMZN
Langan Stocks
25 Jan 15 07:07:06
$XLB Stock Message Board Updated Sunday, January 25, 2015 10:03:13 AM $KO $EEM $MTSL $EBAY http://t.co/RdB9CbHzWE
Tadas Viskanta
25 Jan 15 06:56:38
Sunday links: $AAPL earnings peek, unchallenged overconfidence and 'peak economist.' http://t.co/Bj94sHoEuf $GLD $FXE $BOX $QQQ $EEM $AMZN
Rosner Stocks
25 Jan 15 06:53:08
$EEM Recent News Updated Sunday, January 25, 2015 08:59:23 AM $DAL $TSLA $NKE $RIG http://t.co/YKDQNtqLnS
Claus
25 Jan 15 06:49:50
$EEM breaking the down trajectory but still < 200MA https://t.co/swg3ip0Apd
Langan Stocks
25 Jan 15 06:06:38
$SLW News Updated Sunday, January 25, 2015 08:03:10 AM $BX $RSX $RIG $EEM http://t.co/6VCJ4vSEOE
Rosner Stocks
25 Jan 15 05:52:07
$CAG Investor Opinions Updated Sunday, January 25, 2015 07:59:23 AM $EEM $BBRY $MDY $UNIS http://t.co/yeUWQtndhW
IH News Desk
25 Jan 15 05:51:21
$DIDG News Updated Sunday, January 25, 2015 08:10:46 AM $HAS $LUV $EEM $EWJ http://t.co/tv5jPbuNRk
PolgarStocks
25 Jan 15 05:48:15
$EEM Opinions Updated Sunday, January 25, 2015 08:06:58 AM $INFN $IYT $CELG $XLF http://t.co/3abUoywRfh
Langan Stocks
25 Jan 15 05:06:29
$EXPE Company Info Updated Sunday, January 25, 2015 07:03:11 AM $AFSI $EEM $HYG $TLT http://t.co/ntDRnVbVQP
David Busick
25 Jan 15 04:04:06
RT @seeitmarket: Are International Stocks Returning To Favor? http://t.co/Gy4whhGE0f by @MikeZaccardi | $SPY $EEM $EFA
Langan Stocks
25 Jan 15 04:03:39
$JAZZ Financials Updated Sunday, January 25, 2015 06:03:10 AM $INTC $CY $GDX $EEM http://t.co/KbHEDHd6h1
Rosner Stocks
25 Jan 15 03:50:14
$NTEK Filings Updated Sunday, January 25, 2015 05:59:23 AM $ABX $MDT $EEM $RSX http://t.co/LDj6JxKcgW
Langan Stocks
25 Jan 15 03:03:21
$MNST Opinions Updated Sunday, January 25, 2015 05:03:10 AM $EEM $HYSR $EMAN $TVIX http://t.co/KFERxNY02P
Langan Stocks
25 Jan 15 03:03:19
$EEM Reviews Updated Sunday, January 25, 2015 05:03:10 AM $TNA $CY $GPRO $AFSI http://t.co/Q8NwDJqn9m
Gloria
25 Jan 15 00:56:29
RT @seeitmarket: Are International Stocks Returning To Favor? http://t.co/Gy4whhGE0f by @MikeZaccardi | $SPY $EEM $EFA
Steve
25 Jan 15 00:08:37
RT @seeitmarket: Are International Stocks Returning To Favor? http://t.co/Gy4whhGE0f by @MikeZaccardi | $SPY $EEM $EFA
Roger
24 Jan 15 23:58:33
RT @seeitmarket: Are International Stocks Returning To Favor? http://t.co/Gy4whhGE0f by @MikeZaccardi | $SPY $EEM $EFA
Crypto Guru
24 Jan 15 23:29:22
After the first 3 weeks of 2015, the S&P 500 is flat. Emerging markets, however, are up almost 4% -> http://t.co/l41aGnOvtm $SPY $EEM
Nereida Diesen
24 Jan 15 23:09:52
Are International Stocks Returning To Favor? http://t.co/SPZMjZcRN8 by MikeZaccardi | $SPY $EEM $EFA
Langan Stocks
24 Jan 15 22:59:24
$CAG Percent Change Updated Sunday, January 25, 2015 01:03:28 AM $XLB $BBRY $EEM $HEDJ http://t.co/BemBWAvwyO
See It Market
24 Jan 15 22:56:08
Are International Stocks Returning To Favor? http://t.co/Gy4whhGE0f by @MikeZaccardi | $SPY $EEM $EFA
Rosner Stocks
24 Jan 15 22:45:13
$CSCO Short Sales Updated Sunday, January 25, 2015 00:59:23 AM $TASR $EEM $ALK $IEF http://t.co/ctqXWtKg00
Parksani
24 Jan 15 22:17:11
RT @seeitmarket: Weekend Reading - Global Market Features - http://t.co/SYQ6cnsYoY $SPY $SLV $JJC $EEM
Eric
24 Jan 15 22:04:22
RT @seeitmarket: Weekend Reading - Global Market Features - http://t.co/SYQ6cnsYoY $SPY $SLV $JJC $EEM
It's in the mail
24 Jan 15 21:55:26
RT @seeitmarket: New Post - "Will Central Bank Policies Lead Investors To The Punch Bowl...Again?" http://t.co/k9EgBPBSDd by @ThetaTrend | …
leahanne
24 Jan 15 21:39:13
$ADBE Adobe Systems Incorporated (ADBE) 74.06 +0.58 (+0.79%) $EEM $SYMC $PFE http://t.co/H9h07OJoXa
Langan Stocks
24 Jan 15 19:56:09
$DXD Filings Updated Saturday, January 24, 2015 10:03:12 PM $EEM $BLTA $LMT $ABX http://t.co/lbmIWNONFs
Derek Guo
24 Jan 15 19:49:16
RT @Callum_Thomas: Chart: @sobata416 Fund Flows to #EM equity & bonds went sharply negative - #contrarian buy signal? $EEM $EMB http://t.c…
Derek Guo
24 Jan 15 19:45:52
RT @Callum_Thomas: Chart: @Eurofaultlines On a flows basis #EM is looking as downtrodden as it was before ~15% rally last year $EEM $VWO ht…
Rosner Stocks
24 Jan 15 19:43:07
$IMSC Filings Updated Saturday, January 24, 2015 9:59:22 PM $SH $EEM $BIDU $XLE http://t.co/ojp206sdTF
				
				
By  +Follow December 19, 2013 1:28PM
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