Emerging Market Bloodbath in iShares MSCI Emerging Markets ETF (EEM, quote) and Vanguard FTSE Emerging Markets ETF (VWO, quote) sledded through the 200 day moving average in a way it hasn’t in a long time. 

emerging-markets-BRIC-MINTTerrible start to the year for emerging markets outright and on a relative basis to the SPX where many have placed bets for a strong bounce in 2014.

Why the heavy move today? The day started with weaker than expected China PMI and layer in 3 other important technical and fundamental issues.

1. Current account issues are front and center in Brazil (EWZ, quote), Turkey (TUR, quote) and S. Africa (EZA, quote).  Brazil posted the worst Trade Balance it has seen since 2000

2. Political risk is rising in Thailand (THD, quote), Turkey, and Argentina (ARGT, quote).  Headlines today are nasty.

3. The MSCI EM Index counts Samsung and Hyundai as its #1 and #12th heaviest weighted stocks.  Samsung was -4.6% as the company's CEO expressed concern over hardware reliance.  Hyundai said sales growth will be weakest in over 8 years as competition gets worse and the weaker Yen is hurting Won exports.


Tagged with:

Leave a Reply