Overnight Asian emerging markets followed Western counterparts lower, becoming more cautious ahead of the FOMC meeting and Germany’s high court bond-buying program ruling.
Overnight emerging markets continued to seesaw, shifting between risk-on and risk-off sentiment ahead of the Jackson Hole summit this weekend and the ECB meeting September 6. The seesawing action is clearly seen in China, where equities that scraped and fought to be in green in the prior session are now in the red after last night’s session.
Markets around the globe rebounded Friday on comments from Fed Chairman Bernanke but still finished lower for the week. The iShares MSCI Emerging Markets ETF (EEM, quote) matched the performance in the S&P500 with a loss of about 0.4% while Brazilian markets lagged with the iShares MSCI Brazil (EWZ, quote) losing 1.5% on the week.
While the global oil and natural gas industry is in a recession, the alternative energy sector around the world is in a depression.
Markets overnight did not carry forward the positive mood felt during yesterday’s U.S. session. Asian markets were hit hard when China’s state run news agency Xinhua disputed yesterday’s report that China is ready to launch additional stimulus measures to foster stronger growth.
Data will be fairly light during the first two days after the long weekend but could set the markets up for volatility in the last two days of the week.
Emerging markets saw the largest weekly decline since November last week on softer than expected economic news out of China and a political impasse in Greece that could result in the country leaving the European Union.
U.S. futures are pointing to a mixed open once again on what should be light trading day, with most European and Asian markets closed today. With light trading we find Europe is mixed with the FTSE in the green while the DAX, CAC 40, and SMI are solidly in the red.
The U.S. Commerce Department has ruled that government-subsidized Chinese solar manufacturers have been dumping cheap panels in the U.S. market, putting American solar companies at a disadvantage.