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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
IH News Desk
18 Dec 14 19:08:33
$SMH News Updated Thursday, December 18, 2014 9:11:44 PM $EEM $WMT $EA $USO http://t.co/swHKip2962
Rosner Stocks
18 Dec 14 18:49:37
$ARTX Reviews Updated Thursday, December 18, 2014 8:59:23 PM $CSCO $KO $EEM $TVIX http://t.co/4CnWLYMJRV
iHangout
18 Dec 14 18:08:38
chartguy89: 2014 Trending Stocks: EEM +0.35% Stock Charts $EEM Electricite et Eaux http://t.co/51cQMwswX3
chartguy89
18 Dec 14 18:05:39
EEM +0.35% Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 12/18/2014 20:05:40 EEM Sto http://t.co/NUCNIvkvjf
Jorge A. Beltràn P.
18 Dec 14 17:11:47
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
PolgarStocks
18 Dec 14 16:52:32
$EEM Stock Message Board Updated Thursday, December 18, 2014 7:07:37 PM $XLI $TNA $XLV $ETN http://t.co/TiFLvN7uQi
Rosner Stocks
18 Dec 14 16:48:09
$UNG Stock Price Updated Thursday, December 18, 2014 6:59:24 PM $EEM $GM $VTI $XLK http://t.co/biU7EpfW1S
AllStarCharts Help
18 Dec 14 16:21:52
@manishashah3 saw you asked @Allstarcharts about $EEM $SPY Check out our U.S. Averages package here: http://t.co/gRr9ygdQHt
Jeff Quiggle
18 Dec 14 16:02:30
$MACRO > $TLT $QQQ $SPY $FXI $IWM $GLD $FEZ $EEM $JNK $USO Yesterday > $TLT $GLD $FXI $IWM $QQQ $SPY $FEZ $EEM $JNK $USO
Mike Zaccardi, CMT
18 Dec 14 15:45:59
$EFA underperforming $SPY by 18.52% YTD. $EEM 19.17%
Phillip Ray
18 Dec 14 15:35:43
RT @ETFtrends: Looking for 2015 Emerging Markets Opportunities http://t.co/Nr0dyLDqxo #ETFs #ETF #emergingmarkets $VWO $EEM $DEM $EMCR $INC…
Trading Derivatives
18 Dec 14 15:17:17
RT @ETFtrends: Looking for 2015 Emerging Markets Opportunities http://t.co/Nr0dyLDqxo #ETFs #ETF #emergingmarkets $VWO $EEM $DEM $EMCR $INC…
Corey Griewahn
18 Dec 14 15:13:24
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
Julia Kostova
18 Dec 14 15:08:39
RT @ETFtrends: Looking for 2015 Emerging Markets Opportunities http://t.co/Nr0dyLDqxo #ETFs #ETF #emergingmarkets $VWO $EEM $DEM $EMCR $INC…
FlowerPower
18 Dec 14 15:03:09
(1 of 2) #FastMoneyEspresso FINAL TRADE: Tim Seymour —> sell $EEM Steve Grasso —> buy $DISH
ETF Trends
18 Dec 14 15:01:45
Looking for 2015 Emerging Markets Opportunities http://t.co/Nr0dyLDqxo #ETFs #ETF #emergingmarkets $VWO $EEM $DEM $EMCR $INCO $SCIN
Tom Lydon
18 Dec 14 14:55:31
Looking for 2015 Emerging Markets Opportunities http://t.co/yjEPXXLZn5 #ETFs #ETF #emergingmarkets $VWO $EEM $DEM $EMCR $INCO $SCIN
Nick
18 Dec 14 14:11:57
$EEM (weekly) https://t.co/RTwHDjTwxX Back above that band
Greg Harmon, CMT
18 Dec 14 13:42:52
$EEM confirms reversal higher but with doji star, yuck, 39.25/40.4/41 resistance, support 38/36 http://t.co/mj3CKirpyW
Kenneth Rapoza
18 Dec 14 13:10:05
value wont be enough to save emerging markets next year. : ( http://t.co/u8GpP6PsqJ thinking its going to be a stock pickers mkt. no $EEM
howardlindzon
18 Dec 14 12:40:34
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
John H Armstrong
18 Dec 14 12:25:56
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
Adeodato Volpi Netto
18 Dec 14 12:19:20
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
CarlosRoblesPeñúñuri
18 Dec 14 12:14:40
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
Stock pЯop
18 Dec 14 12:13:39
RT @StockTwits: Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP4…
StockTwits
18 Dec 14 12:12:36
Long the U.S., short Emerging Markets. That could be one of the best pair trades heading into 2015 -> http://t.co/2UP0yDP40O $SPY $EEM
finsovet
18 Dec 14 11:56:51
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
CARLO GALLINA, CFA
18 Dec 14 10:59:11
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
Market Int Center
18 Dec 14 10:52:18
iShares MSCI Emerging Markets Index $EEM Showing Bearish Technicals ( http://t.co/Qvy2kxfvy9 )
Financial Tailor
18 Dec 14 10:51:55
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
Lagos Capital
18 Dec 14 10:50:43
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
'ga re Tshwane'
18 Dec 14 10:50:39
fyi @Richards_Karin MT @allstarcharts This continues to be one of my favorite charts in the...Long $SPY / Short $EEM http://t.co/faxmTIIcio
'ga re Tshwane'
18 Dec 14 10:48:35
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
Linda
18 Dec 14 10:48:02
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
Tweed
18 Dec 14 10:47:50
RT @allstarcharts: This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http:…
J.C. Parets
18 Dec 14 10:46:11
This continues to be one of my favorite charts in the world. And I look at a lot of them: Long $SPY / Short $EEM http://t.co/2O46PkfGiC
lookn4wins
18 Dec 14 10:34:41
$YPF Chart $YPF Most recent stock chart and technical analysis. $YPF $EEM $SOXL $TQQQ $GOOG $XLP http://stockc http://t.co/QPOCAf2oXq
HiRisk
18 Dec 14 10:29:11
@TheShadowTrader all ur longs? Even ur investment positions like $EEM - Europe etc?
Jeff Hauschild
18 Dec 14 09:52:43
#China dimsum #bond ETF $DSUM looks like it/dimsums/etc are about to fall out of bed. Next shoe? $EEM $FXI $SPY $CNY http://t.co/nDcG3O4TBA
Dimitra DeFotis
18 Dec 14 09:26:17
India Market Gains Ground, Watch The Rupee http://t.co/rFfoZcecWy via @barronsonline $INDY $SMIN $INCO $EEM $IBN $INFY
FMD Capital
18 Dec 14 09:26:15
Identifying ETF Global Values Plays for 2015 via @nasdaq http://t.co/IS65B1GOJq $SPY $EFA $EEM $GVAL $IWM
Dimitra DeFotis
18 Dec 14 09:24:57
Ruble Devaluation: How Much is Too Much? http://t.co/SCQKnHOtcL via @barronsonline $EEM $INCO $EZA $EWW
Investors Hangout
18 Dec 14 09:21:21
DennyT: EEM Short Sales $EEM $BABA $GOOGL $SMH $CVX http://t.co/4jjVI0gCu7
Investors Hangout
18 Dec 14 09:21:21
DennyT: EEM Short Sales $EEM $BABA $GOOGL $SMH $CVX http://t.co/3rFg1K1xVs
Crystal Franks
18 Dec 14 09:15:27
RT @lancejepsen: Emerging Markets ETF Plunge and How to Play $EEM $EDZ http://t.co/Wcuz5au0ka http://t.co/dNh4Q9q0in
DennyT
18 Dec 14 09:14:12
EEM Short Sales $EEM $BABA $GOOGL $SMH $CVX Barchart Opinion,200 Simple Moving Average,High,Company News,Buzz http://t.co/C6StYisZVt
charts not opinions
18 Dec 14 08:00:28
@ReutersJamie @TheStalwart and just another reason to sell European equities,Draghi got nothin sell $EAFA $EEM and buy $SPY
MarketCurrents
18 Dec 14 07:53:17
Deutsche not buying emerging markets rally http://t.co/0mByRtYk2I $EEM $VWO $EDC $EDZ
Jason Arroyo
18 Dec 14 07:45:41
RT @lancejepsen: Emerging Markets ETF Plunge and How to Play $EEM $EDZ http://t.co/Wcuz5au0ka http://t.co/dNh4Q9q0in
Investors Hangout
18 Dec 14 07:29:58
Emylers: $EEM Up to date company activities and other http://t.co/5CwhkKWeNE
				
				
By  +Follow December 19, 2013 1:28PM
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