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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
MACRO Y TENDENCIAS
20 Oct 14 05:14:37
"@CESAROMSE: $GGAL http://t.co/ex7g6PZjKP rotten fish to reduce positions, the Argentine government will never be rational $YPF $BMA $EEM "
Stock Forums
20 Oct 14 03:32:23
$FLPC Stock Forum Click Here: http://t.co/dQG3wyGTIq Also See: $SSO $MBLY $TMV $EEM ~
Investors Hangout
20 Oct 14 02:54:53
$EWU Company Info Click Here: http://t.co/zxrKLTE6Ga Also See: $EEM $EXK $EWJ $FB ~
Stock Forums
20 Oct 14 02:32:42
$FAST Exchange Click Here: http://t.co/VkIP4DiNmR Also See: $RCH.TO $IWM $EEM $GOOG ~
Investors Hangout
20 Oct 14 02:16:09
$EWU Bid Click Here: http://t.co/n71z4gjyNy Also See: $WMT $EEM $HAL $VSN.TO ~
Stock Forums
20 Oct 14 00:19:25
$EWJ E.P.S. Click Here: http://t.co/EjABgJL38R Also See: $GDXJ $XIV $SLV $EEM ~
Sleek Money
20 Oct 14 00:07:38
iShares MSCI Emerging Markets Indx $ETF Sees Significant Growth in Short Interest $EEM http://t.co/xRDfioFMzi
Investors Hangout
19 Oct 14 23:49:47
$EEM Last Trade Click Here: http://t.co/DHIffDyPg3 Also See: $FAST $UGA $HD $ROYT ~
US Banking News
19 Oct 14 23:44:13
iShares MSCI Emerging Markets Indx $ETF Sees Significant Growth in Short Interest $EEM http://t.co/g5890tVMoy
Phone Search
19 Oct 14 23:43:55
RT @TickerReport: iShares MSCI Emerging Markets Indx $ETF Sees Significant Growth in Short Interest $EEM http://t.co/RezDxsmDeC
Ticker Report
19 Oct 14 23:43:02
iShares MSCI Emerging Markets Indx $ETF Sees Significant Growth in Short Interest $EEM http://t.co/RezDxsmDeC
Rosner Stocks
19 Oct 14 23:29:58
$EEM P/E Ratio Click Here: http://t.co/Z0JJWhvYrY Also See: $TMF $UGA $IEF $DBA ~
Chasing Stars
19 Oct 14 23:29:56
$EEM Tick Click Here: http://t.co/hHSgq4OaNq Also See: $EPI $IJR $F $UBT ~
Investors Hangout
19 Oct 14 23:14:21
$EEM Ex-Div Date Click Here: http://t.co/VtoqdxE7f7 Also See: $F $HYG $PSCF $UNG ~
Stock Forums
19 Oct 14 22:25:47
$EEM Prev Close Click Here: http://t.co/TEsJmokIXJ Also See: $ERX $EIRL $WESC $VEU ~
Investors Hangout
19 Oct 14 20:52:38
$CSCO Stock Forum Click Here: http://t.co/acnKqqs1Tq Also See: $TVIX $EEM $WMT $UGAZ ~
Investors Hangout
19 Oct 14 20:33:11
$CMI Bid Size Click Here: http://t.co/yMIXgDvXZg Also See: $IEF $GLOG $TSLA $EEM ~
Andrew Kassen
19 Oct 14 19:53:39
RT @seeitmarket: New Post: "Big Moves Expected With Brazil ETF (EWZ)" http://t.co/wgm182QX1W by @MikeZaccardi $EWZ $EEM $VIX $STUDY
See It Market
19 Oct 14 19:47:56
New Post: "Big Moves Expected With Brazil ETF (EWZ)" http://t.co/wgm182QX1W by @MikeZaccardi $EWZ $EEM $VIX $STUDY
Chasing Stars
19 Oct 14 18:41:57
$BABA Ask Click Here: http://t.co/ekal91xcKL Also See: $QTMM $EEM $AA $CYBR ~
Chasing Stars
19 Oct 14 18:20:28
$ARWR Filings Click Here: http://t.co/wdD9ILCEHN Also See: $EEM $FDX $NKE $JPM ~
Investors Hangout
19 Oct 14 16:35:19
chartguy89: EEM 3.10 Stock Charts $EEM Electricite et Eaux de http://t.co/Goadf0A53P
Investors Hangout
19 Oct 14 16:35:18
chartguy89: EEM 3.10 Stock Charts $EEM Electricite et Eaux de http://t.co/SOiDrUPiEJ
iHangout
19 Oct 14 16:33:46
http://t.co/jYcEVtZYAh chartguy89: Stock Charts: EEM 3.10 Stock Charts $EEM Electricite et Eaux de http://t.co/FGkrbipFxn
chartguy89
19 Oct 14 16:31:17
EEM 3.10 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 10/19/2014 18:31:19 EEM Stock http://t.co/DhCD6ezsX5
Claus
19 Oct 14 15:39:36
$EEM back to the middle of the triangle, no trend https://t.co/odOWFa2D6c
Stock Forums
19 Oct 14 15:33:42
$AAPL Summary Click Here: http://t.co/H14996Fc34 Also See: $XLI $PCLN $CMI $EEM ~
Tweeter!
19 Oct 14 12:14:14
World millionaire population to surge 50% by 2019 http://t.co/DP0RKLFQsf supported by an explosion of wealth in emerging markets $EEM
$EEM
19 Oct 14 07:42:59
Have you heard ‘Lil Dell Ft $eem - Grind To Get It’ by TSMGJBFMG 5100 on #SoundCloud? https://t.co/TuwWLa66ak
Dimitri Vassilaros
19 Oct 14 06:33:58
RT @traderskillset: @Jonteinspain @1Dimitri We see Turkey headed for a #currency or #debt crisis. $USDTRY $TUR $EEM http://t.co/nKZqpwi1Rc
TraderSkillset
19 Oct 14 05:09:39
@Jonteinspain @1Dimitri We see Turkey headed for a #currency or #debt crisis. $USDTRY $TUR $EEM http://t.co/nKZqpwi1Rc
$EEM
18 Oct 14 19:50:12
Listen to Lil Dell Ft $eem - Grind To Get It by TSMGJBFMG 5100 #np on #SoundCloud http://t.co/99buko5Xog
TraderSkillset
18 Oct 14 13:09:36
@nntaleb Currency or debt crisis risk higher in Turkey than any other EM. $USDTRY $EEM $TUR
$EEM
18 Oct 14 12:32:00
Lil Dell Ft $eem - Grind To Get It by TSMGJBFMG 5100 via #soundcloud http://t.co/kqnJYhzqcs
Andrea Manea, CFA
18 Oct 14 11:09:07
RT @MikeZaccardi: YTD TR: $VTI +2.6% $SPY +3.5% $IWM -6.0% $EFA -7.4% $EEM -1.8% $AGG +5.6%
Jessup Wealth Mgmt
18 Oct 14 11:04:00
RT @MikeZaccardi: YTD TR: $VTI +2.6% $SPY +3.5% $IWM -6.0% $EFA -7.4% $EEM -1.8% $AGG +5.6%
Mike Zaccardi, CMT
18 Oct 14 10:55:43
YTD TR: $VTI +2.6% $SPY +3.5% $IWM -6.0% $EFA -7.4% $EEM -1.8% $AGG +5.6%
J.C. Parets
18 Oct 14 08:34:54
Last 2 times this happened in Emerging Markets $EEM we got 20% rallies in a short period of time. Sign up to find out http://t.co/0c3vPvCiNh
KAVEH ILKHANIPOUR
18 Oct 14 07:26:01
RT @harmongreg: $SPY Trends and Influencers October 18, 2014 http://t.co/kRGA8Kx4eA $IWM $QQQ $TLT $VXX $EEM $USO $GLD $UUP $SSEC
Danny
18 Oct 14 07:23:59
@MktOutperform Things do quickly change indeed: narrow spreads were your biggest $EEM rally argument, now it is opposite.
Greg Harmon, CMT
18 Oct 14 07:22:03
$SPY Trends and Influencers October 18, 2014 http://t.co/kRGA8Kx4eA $IWM $QQQ $TLT $VXX $EEM $USO $GLD $UUP $SSEC
Rectitude Market
18 Oct 14 04:04:25
RT @HedgeHouseKwt: #Cross Economies – Signs of pullbacks in $FEZ $EWJ $SPY , $EEM most resilient w/bullish abnormal Vol.
Hedge House Kuwait
18 Oct 14 02:59:35
#Cross Economies – Signs of pullbacks in $FEZ $EWJ $SPY , $EEM most resilient w/bullish abnormal Vol.
Hedge House Kuwait
18 Oct 14 02:57:43
#Cross Economies ETFs week perform- Euro $FEZ (0.08%) Japan $EWJ (0.73%) US $SPY (1.09%) Emerging $EEM +0.52%
Michel Audeban
17 Oct 14 22:40:19
RT @ndebreteuil: Why Are U.S. Invest. So Afraid Of Emerging Markets? @StateStreet Weighs In. http://t.co/BNPfzusFYP via @barronsonline $RSX…
Ben Silverberg
17 Oct 14 22:17:13
Leading market sectors higher Friday included: $SPY $QQQ $DIA $XLF $XLB $XLI $IYT $XLE $XLV $XLY $IBB $ITB $IYR $FXI $EEM $USO
BetterBeta Trends
17 Oct 14 20:58:46
No longs. Shorts: $EEM $IWM $EWZ. Closing $EFA and $OIH on Monday- both shorts stopped out on Friday's close. No new positions for Monday.
008
17 Oct 14 20:19:17
Conjugal vi$it$ make $ex $eem $o irrelevant...
Kavela Londer
17 Oct 14 20:06:08
The Easy Money In EM Has Been Made, But Japan Still Attractive - Barclays http://t,co/wZhabjN24G $VWO $EEM $EWJ http://t
TalkMarkets
17 Oct 14 17:37:41
Market Summary; Saturday Morning Cartoons $EEM $SPY $VIX $GLD http://t.co/HAb6zl1rCp
				
				
By  +Follow December 19, 2013 1:28PM
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