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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
divyang parmar
30 Sep 14 22:58:57
RT @TraderHMS: Only 1 in 500 traders will succeed in the markets. Do you agree? : Trading Card 59 #stocks #trading $SPY $QQQ $EEM http://t.…
divyang parmar
30 Sep 14 22:58:05
RT @TraderHMS: As a trader, you can always do a better job: Trading Card 89 $SPY $QQQ $EEM $VXX $ES_F $STUDY http://t.co/7ZV78xlRhW
chartguy89
30 Sep 14 22:47:41
EEM 3.26 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 10/01/2014 00:47:39 EEM Stock http://t.co/DiWGhePenD
Stock Forums
30 Sep 14 22:35:27
$MHYS Stock Forum Click Here: http://t.co/PVv13BxeXq Also See: $EEM $JRJC $V $FXC ~
Chasing Stars
30 Sep 14 21:54:17
$HRDND Day Low Click Here: http://t.co/LxKVo4OCZ8 Also See: $GOOGL $EEM $AGIO $BIIB ~
Investors Hangout
30 Sep 14 21:35:16
$HRDND Yield Click Here: http://t.co/mxs5t5bihR Also See: $VTI $EEM $GS $IWM ~
Jeff Hauschild
30 Sep 14 20:52:07
#IMF in talks to help #Liberia count #ebola exports in their #GDP and #trade figures, you know, so their #stocks will go up. $spy $tlt $eem
Unusual Stocks
30 Sep 14 20:45:10
RT @stockmarketpb: $USD nearing resistance at $88, time to look at $XLE, $GLD, $EEM? http://t.co/i7LnVas1RD http://t.co/SXJ1svRtlA
Rosner Stocks
30 Sep 14 20:41:37
$FNMA Message Board Posts Click Here: http://t.co/aFtZ3z8W9u Also See: $UGAZ $UDN $GM $EEM ~
Nov.6
30 Sep 14 20:24:37
RT @moonhigh06: I'm A Joke To Many But I $eem To Be The Only One Laughing
♿️Dee Moon ♿️
30 Sep 14 20:23:48
I'm A Joke To Many But I $eem To Be The Only One Laughing
Chasing Stars
30 Sep 14 20:10:43
$FBEC Last Price Click Here: http://t.co/4mPT4h5WNP Also See: $EEM $BIIB $SDS $MMM ~
OTPicks.com
30 Sep 14 20:05:30
http://t.co/hjgLwIcNgz DennyT: AA Industry $AA $X $EEM $SHPG $MCD: DennyT http://t.co/RtH7oSEYZW http://t.co/hjgLwIcNgz
B
30 Sep 14 19:14:46
(cont) Emerging Markets and Latin America are better risk / reward as well, compared to S&P etc... $EEM, $VWO, $ILF etc etc..
Rosner Stocks
30 Sep 14 19:08:01
$CGRA Ask Size Click Here: http://t.co/pAV40twSML Also See: $FLY.V $ELRA $EEM $NEOM ~
Stockmarketplaybook
30 Sep 14 19:07:49
$USD nearing resistance at $88, time to look at $XLE, $GLD, $EEM? http://t.co/i7LnVas1RD http://t.co/SXJ1svRtlA
Langan Stocks
30 Sep 14 18:38:26
Rosner: EEM iShares Trust $EEM Company Overview Stock http://t.co/zLbJy4ezzI
Rosner Stocks
30 Sep 14 18:38:11
Rosner: EEM iShares Trust $EEM Company Overview Stock http://t.co/wqkcitHzLa
Rosner Stocks
30 Sep 14 18:35:59
EEM iShares Trust $EEM Company Overview Stock Message Board Recent Posts http://t.co/Ag67TOPoq2 http://t.co/rCxzg81KxG
City Trading
30 Sep 14 18:15:56
Emerging market ETF taking a beating $EEM http://t.co/Am2ldYljxQ
iHangout
30 Sep 14 18:13:21
http://t.co/jYcEVtZYAh chartguy89: Stock Charts: EEM 3.26 Stock Charts $EEM Electricite et Eaux de http://t.co/aUTeMr6MyA
iHangout
30 Sep 14 18:12:51
http://t.co/8zZJWO68ZG Stock_Tracker: Stock DD Board: Emrg Mkts Index MSCI Ishares (EEM) 41.56 $EEM http://t.co/uctPjiIBSL
chartguy89
30 Sep 14 18:11:47
EEM 3.26 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 09/30/2014 20:11:44 EEM Stock http://t.co/TfDGhd8LDf
Stock_Tracker
30 Sep 14 18:09:56
Emrg Mkts Index MSCI Ishares (EEM) 41.56 $EEM After Yesterday's Decline of 2.03%, iShares MSCI Emerging Market http://t.co/QT5M1clHJx
City Trading
30 Sep 14 18:04:49
$EEM not looking so good! http://t.co/G6MfIMfd4C
Mitch
30 Sep 14 16:48:54
RT @MikeZaccardi: $EFA $EEM $IWM all within bps of 10% correction from 2014 highs (at today LoD). $SPY just a bit over 2% off
Mike Zaccardi, CMT
30 Sep 14 16:48:11
$EFA $EEM $IWM all within bps of 10% correction from 2014 highs (at today LoD). $SPY just a bit over 2% off
Steven Schoenfeld
30 Sep 14 15:08:29
$EEM & $VWO not far behind @TomLydon: Nearing Bear Markets, #Brazil, #Russia ETFs http://t.co/2sN9nJPiAu #bearish $EWZ $RSX $FXI $EPI”
Jeff Quiggle
30 Sep 14 14:36:43
$MACRO > $QQQ $TLT $SPY $USO $FEZ $IWM $FXI $EEM $GLD $JNK Yesterday > $QQQ $TLT $SPY $USO $FEZ $IWM $FXI $EEM $GLD $JNK
Greg Harmon, CMT
30 Sep 14 14:04:04
$EEM held at low w/ 41/40.50 support lower, resistance 42.54/43/44 http://t.co/dHsRhSpKFR
ETFalpha
30 Sep 14 13:29:54
::: Asset Allocation Risk ON/OFF ::: $SPY $VGK $EEM $EPP $EWJ ::: Follow us & we will follow you back ::: Send us a DM here 4 more details
Top ETF Funds
30 Sep 14 13:25:49
Why emerging markets have underperformed in 2014 so far.. http://t.co/VWA0ONniQi $EEM #ETF #ETFs #Stocks
Top ETF Funds
30 Sep 14 13:25:31
Don't Blame Emerging Markets and High Yield Bonds for Stock Declines.. http://t.co/91etDk3uuu $EEM #ETF #ETFs #Stocks
Top ETF Funds
30 Sep 14 13:25:14
Despite underperformance, emerging markets are still growing fast.. http://t.co/rlKy6FBXWm $EEM #ETF #ETFs #Stocks
Top ETF Funds
30 Sep 14 13:24:52
Why global equities have had a stellar run since June 2012.. http://t.co/E8qyCuIHaQ $EEM #ETF #ETFs #Stocks
¥€$
30 Sep 14 12:27:01
From July 9th/10th... $EEM went up to $45.85 and has plummeted over 9% immedaitely after this. Just 1 example. http://t.co/KJXVSnSzA0
MACRO Y TENDENCIAS
30 Sep 14 12:08:58
RT @SeRgioTomadaok: “@caomse1: #DOLARBLUE OBJETIVO 22 PARA DICIEMBRE $GGAL $TS $BMA $TX $EEM $EWW $EWZ http://t.co/2a1RgbHdxp” será el nuev…
Paul Houck
30 Sep 14 11:56:29
$EEM green. Hmmm...
Jeremy Hill
30 Sep 14 11:28:14
$HYG $EEM $SPY performance since 8/15. Also about it here: http://t.co/yGPxZwoXjl @ppearlman http://t.co/fUvmUjrGM8
Jeremy Hill
30 Sep 14 11:14:39
High Yield and EM Didn't Cause Stock Sales... Not Yet http://t.co/WnCP0M6iH9 via @YahooFinance @ppearlman $HYG $EEM
BlockTradeAlert
30 Sep 14 11:14:32
BLOCK TRADE: $EEM 754,365 shares @ $41.49 [14:14:32]
BlockTradeAlert
30 Sep 14 11:04:53
BLOCK TRADE: $EEM 1,258,457 shares @ $41.44 [14:04:52]
Leo Nelissen
30 Sep 14 10:55:47
RT @KaiPflughaupt: Commodities ↓ = $DXY ↑ = EM Currencies $CEW ↓ = EM Stocks $EEM ↓ (there goes your "embedded Income Yield 5%" p.a.) http:…
kai­•pflughaupt
30 Sep 14 10:50:53
Commodities ↓ = $DXY ↑ = EM Currencies $CEW ↓ = EM Stocks $EEM ↓ (there goes your "embedded Income Yield 5%" p.a.) http://t.co/zHqL7QmV8E
Mario Hugo Bianchi
30 Sep 14 10:40:59
RT @caomse1: #DOLARBLUE OBJETIVO 22 PARA DICIEMBRE $GGAL $TS $BMA $TX $EEM $EWW $EWZ http://t.co/IJwSxgGOr8
leahanne
30 Sep 14 10:26:48
$DRIO Labstyle (DRIO) 0.1080 +0.0005 (+0.47%) $VTI $V $EEM http://t.co/uKC5rpc8rc
MACRO Y TENDENCIAS
30 Sep 14 10:17:17
#DOLARBLUE OBJETIVO 22 PARA DICIEMBRE $GGAL $TS $BMA $TX $EEM $EWW $EWZ http://t.co/IJwSxgGOr8
Strathbridge
30 Sep 14 09:46:24
Brazil etf $ewz down nearly 20% in September! Surprisingly it is nearly flat for the yr. What a difference a month makes $eem #bric $ibov
Investors Hangout
30 Sep 14 09:39:31
DennyT: AA Industry $AA $X $EEM $SHPG $MCD http://t.co/tpXRwih8Q9
Investors Hangout
30 Sep 14 09:39:30
DennyT: AA Industry $AA $X $EEM $SHPG $MCD http://t.co/lfoBgpU88H
				
				
By  +Follow December 19, 2013 1:28PM
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