Global growth concerns and fretting over the sustainability of U.S. job growth pressured the markets today causing a steep sell-off. Unexpected Chinese import numbers, weak performance from Spanish bonds, Japanese Central Bank policy inaction, and poor confidence in the French economy all helped give American equities an absolute drubbing today.
Emerging Stocks in Five-Day Slide on Chinese Economy Concerns
The iShares MSCI Emerging Market Index ETF (EEM, quote) is trading at its lowest levels in two months on fears of slowing Chinese growth, Bloomberg reports. China (FXI, quote) reported a surprise trade surplus with imports coming in below expectations. According to one analyst, this is indicative of slowing Chinese domestic demand.
Spanish Bonds Fall Even as Rajoy Unveils More Budget Cuts In spite of ambitious budget cuts totaling an additional 10 billion euros ($13 billion) proposed by the new Spanish Prime Minister, concerns over a potential bailout for Spain (EWP, quote) remain. As a result, markets continued to pressure bond prices for the Mediterranean nation, with yields rising 20 basis points to 5.95% today, according to Bloomberg.
French Business Confidence Stalls, Factory Output Drops
The euro zone received more discouraging news this morning as business confidence and factory output declined in France (EWQ, quote). Debt-reduction policies from Spain, Italy, and France itself are being blamed for France’s economic stagnation, reports Bloomberg.
Italy Leads Slide in European Stocks
Italian equities (EWI, quote) fell on the back of rising Italian debt yields, Spanish contagion concerns, and Chinese import data, according to the Wall Street Journal.
Russian Stocks Drop as Oil Falls on Inventories, Chinese Imports
Bloomberg reports that Russian stocks (RSX, quote) fell on Tuesday due to a drop in crude oil prices from an increase in American inventories. Chinese import data has also been blamed for today’s sell off.
Vietnam: A Surprise Cut
According to the Financial Times, Vietnam’s Central Bank cut interest rates for the second times this month. Because of slowing growth and inflation leveling off, the bank felt that increasing liquidity was the most appropriate method to catalyze growth in Vietnam (VNM, quote).
BRICs: Growing, But Not Happier
The Financial Times reports, courtesy of a survey conducted by Gallup, the satisfaction of citizens of emerging markets is not rising at the rate one would expect from these fast-growing economies.