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Turkey, China Stocks Drag Down Emerging Markets Again

By  +Follow December 19, 2013 1:28PM
Tickers Mentioned:

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
2 Sep 14 06:58:10
@RiskReversal Buying $EEM Oct 45 calls, buying $FNSR, $FEYE, and staying long $TWTR (selling upside calls against position).
2 Sep 14 06:55:48
@Michael_Khouw Buying the $EEM Oct 45 calls for $1 or less.
Stock Forums
2 Sep 14 06:55:21
$EEM News http://t.co/7hLKTeEJUv Also See: $IBB $SMH $YRI.TO $DISH ~
Langan Stocks
2 Sep 14 06:48:57
$EEM Financials http://t.co/VY3GJGDhVp Also See: $GE $MBLY $GLD $ORE.TO ~
2 Sep 14 06:45:48
$EEM Volume http://t.co/rekUq6lNWF Also See: $AEM $IYR $ABX $SIPC ~
IH News Desk
2 Sep 14 06:45:10
$EEM Day High http://t.co/aF2pbTbhRz Also See: $MO $XLY $GNCP $BTU ~
2 Sep 14 06:43:08
$EEM Yield http://t.co/CKyWyt8H6l Also See: $DRYS $ITUB $DBC $QTMM ~
2 Sep 14 06:19:38
ICYMI The Rotation Report is up: http://t.co/ZN0gwGHHlO $EEM $YELP $SPY $qqq $dba $xly"
Antonio Scaletti
2 Sep 14 05:54:30
Interest rates spike $TLT caused a '13 $SPY $EEM $DIA $QQQ $IWM selloff, but holiday week + Draghi, so I guess it doesn't apply, I'm lost
2 Sep 14 05:45:32
$DIA Day Low http://t.co/OR1hvZAPM1 Also See: $UNG $ATHM $EEM $EXPE ~
2 Sep 14 05:17:09
@jimcramer good value in $EEM?
Stock News Headlines
2 Sep 14 05:16:10
$EEM: China Behind 13 Weeks Of Investor Inflows To Asia http://t.co/VDUWlAkphj http://t.co/anZkBBz3bI
2 Sep 14 05:07:40
#Indexes often get #EmergingMarkets wrong http://t.co/ijot3jjhh2 $EEM $VWO $IEMG $DEM $EMF $TEI $FM $EMFM $FRN $FFD #IndexFunds #Investing
2 Sep 14 05:04:40
Ashmore Investment Management: Aggressive Western #ForeignPolicy threatens #EmergingMarket progress http://t.co/ssFzCRgv9s $EEM $VWO $IEMG
2 Sep 14 05:00:59
$USD strength+EM #Stock price rises: Is this divergence an #EmergingMarket warning sign? http://t.co/UezjJMcxTP $EEM $VWO $IEMG $DEM $EMF
Investors Hangout
2 Sep 14 04:49:51
$CSCO Tick http://t.co/MHvvTsvxrK Also See: $EEM $XLE $VVUS $HIMX ~
2 Sep 14 04:46:32
#EmergingMarket #Stocks advance on #Reform themes & #CentralBank expectations http://t.co/oXnytd1pXO $EEM $VWO $IEMG $DEM $EMF $TEI $FM $FRN
Business News Watch
2 Sep 14 04:16:11
$EEM: China Data Falls As Expected, Reforms Moving Forward http://t.co/H9WuLvSffp http://t.co/ozZq03Nqvs
Stock Forums
2 Sep 14 04:01:29
$CHK Current Price http://t.co/gQxnFgHoPv Also See: $SLTD $DGLY $EEM $SLXP ~
Langan Stocks
2 Sep 14 03:43:38
$CELG Bid http://t.co/vELIbmzPqX Also See: $EEM $IYR $XLI $TSO ~
Options TradingIQ
2 Sep 14 03:42:13
$EEM false breakout? MACD bearish divergence, stochastics rolling over. Keep an eye on it either way. could lead $SPY http://t.co/v5EMN5qLzl
Langan Stocks
2 Sep 14 02:53:08
$BSX 52Wk Low http://t.co/N6UlvG14Wh Also See: $DISH $EWI $TOU.TO $EEM ~
Investors Hangout
2 Sep 14 02:50:16
$BITA Ask Size http://t.co/W5lGZPhvBk Also See: $M $ATHM $EEM $XLF ~
2 Sep 14 02:47:36
Emrg Mkts Index MSCI Ishares (EEM) 45.06 $EEM This Massive Hedge Fund Company Sold Warren Buffett's Company. S http://t.co/8fMsBxrlGu
Stock News Guru
2 Sep 14 00:16:10
$EEM: SPY Trends and Influencers August 30, 2014 http://t.co/PeIfEookU2 http://t.co/TwcxG9VrRr
Investors Hangout
2 Sep 14 00:10:16
Stock_Tracker: Emrg Mkts Index MSCI Ishares (EEM) 45.06 $EEM http://t.co/XKf7zYFjZ6
Investors Hangout
2 Sep 14 00:10:11
Stock_Tracker: Emrg Mkts Index MSCI Ishares (EEM) 45.06 $EEM http://t.co/wFOvCmhpne
2 Sep 14 00:06:36
EEM 3.65 Stock Charts $EEM Electricite et Eaux de Madagascar (EPA) Last Updated: 09/02/2014 02:06:38 EEM Stock http://t.co/FCtTbDMZJb
2 Sep 14 00:06:12
Emrg Mkts Index MSCI Ishares (EEM) 45.06 $EEM This Massive Hedge Fund Company Sold Warren Buffett's Company. S http://t.co/kLereJGG8S
1 Sep 14 20:19:51
No new long positions for Tuesday's open. Still long $EEM and short $GLD. Closed short $USO and long $IYR last week for gains.
Stock Market News
1 Sep 14 19:16:13
$EEM: Emerging Market Evening Reading http://t.co/4c2L5RBFu0 http://t.co/BcKKLOoMaH
1 Sep 14 18:48:36
RT @DeidreZune: MSCI's Russia stock index down 17.5%, while broad Emerging Markets index Up 8.5% http://t.co/rADIX9sd6I Reason: #PUTIN #UK…
1 Sep 14 18:45:44
MSCI's Russia stock index down 17.5%, while broad Emerging Markets index Up 8.5% http://t.co/rADIX9sd6I Reason: #PUTIN #UKRAINE $RSX $EEM
Becky Hiu
1 Sep 14 17:37:37
"@fabiancapital: Great chart work here ---> "@a_jackson: The Rotation Report is up: http://t.co/J3hkPfUIYo $EEM $YELP $SPY $UGAZ $XLB $XRTX"
$wamp Boy™ ✨
1 Sep 14 17:35:44
I dont like my baby up$et $o if $he $eem up$et you can believe ima try to change that 😘😘😘😘
Top ETF Funds
1 Sep 14 15:54:19
Mexico ETFs Back on Track?.. http://t.co/5XlMgcQsdI $EEM #ETF #ETFs #Stocks
Edward Gofsky
1 Sep 14 15:43:17
RT @muathe: [VIDEO REPOST] Weekend Market Analysis 08/31/2014 [PUBLIC] $DJIA $IWM $GDX $XLF $EEM $EWJ $VXX $FXI $TZA $GDXJ $VWO http://t.co…
Jordan Black
1 Sep 14 15:04:04
"@a_jackson: The Rotation Report is up: http://t.co/Du0WkRMunz $EEM $YELP $SPY $UGAZ $XLB $XRT" great post..must read Labour Day
Market Compass
1 Sep 14 14:16:13
$EEM: The must-know investor outlook for Indian markets http://t.co/jaHyv1tl7t http://t.co/mirKtUTzJm
FMD Capital
1 Sep 14 13:36:39
Great chart work here ---> "@a_jackson: The Rotation Report is up: http://t.co/pCKY0RAdwr $EEM $YELP $SPY $UGAZ $XLB $XRT"
Wall Street Monitor
1 Sep 14 13:16:10
$EEM: Philippines ETF Shines in Emerging Asia http://t.co/xzV4ckclvd http://t.co/B1Dbnx98Y2
Top ETF Funds
1 Sep 14 13:15:48
Why investors will find Ukraine harder to ignore.. http://t.co/AYZYWAnUYB $EEM #ETF #ETFs #Stocks
Top ETF Funds
1 Sep 14 13:15:31
China Data Falls As Expected, Reforms Moving Forward.. http://t.co/0IB14S6yY0 $EEM #ETF #ETFs #Stocks
Top ETF Funds
1 Sep 14 13:15:15
Major Investments At Risk As Russian Sanctions Become More Nerve Wracking.. http://t.co/lLlr1WpEZ9 $EEM #ETF #ETFs #Stocks
1 Sep 14 13:03:13
The Rotation Report is up: http://t.co/LVsPr6wYZH $eem $yelp $spy $ugaz $xlb $xrt
1 Sep 14 10:07:00
$RPV Buy? Click here to find out if $RPV is a buy hold or sell. Watching these stocks. $EBAY $EEM $HPJ $GLD ht http://t.co/AUqpjzTYv9
Livermore's Lounge
1 Sep 14 08:48:03
$EEM $EEB whoa! http://t.co/JznxGc9x4X
Shan Shan Xie
1 Sep 14 08:40:03
RT @ReformedBroker: Emerging Markets are breaking out - ironically, coinciding with taper's end. Keep theorizing. http://t.co/oKzSspm4v5 $E…
1 Sep 14 08:40:00
http://t.co/iDjURHVkxM "Hammer bang " LIDDELL ft $EEM
Eric Balchunas
1 Sep 14 08:29:26
Latest Radio Report --> Balchunas Says $57 Billion Poured Into ETFs This Summer (Audio) via @BloombergNews http://t.co/fuQL9jaxvo $SPY $EEM
By  +Follow December 19, 2013 1:28PM



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