Economic and market news from China remains consistently negative recently. This has impacted not only its equity markets but the many global markets dependent on China’s economic vitality. These countries or regions consist of Emerging, Asia/Pacific and Latin America markets, but now also include Developed markets. After all, China is now the world’s second largest economy making it difficult for even Developed markets to ignore. As a state-controlled economy, it believes it can take a long-term view of economic conditions that would frustrate fast moving independent markets.
The week of January should mean more active trading in the U.S. and elsewhere as the Holiday period ends. Many believe, as the first five trading days of January go, so too will the year. Others believe this maxim applies only to the entire month of January. That said, the current week contains important data (Employment, Fed Minutes, earnings and so forth) that by week’s end may provide clues to how the U.S. economy and markets may perform going forward.
Taken together this means short-term uncertainty prevails.
Major U.S. market sectors (DIA, SPY and QQQ) posted minor losses Monday but their performance masked much larger losses in other sectors that included: Transports (IYT), Homebuilders (ITB), Biotech (IBB), Retail (XRT), Small Caps ((IWM), (China (FXI), Emerging Markets (EEM), Brazil (EWZ), Mexico (EWW), Russia (RSX), India (INP) and Crude Oil (USO). Gains seen in previously beaten-down sectors included: REITs (IYR) Gold Miners (GDX), Gold (GLC), and Bonds (TLT).
Gold’s gains today came amid either “a bear raid” or “a fat finger” trade that caused a mini-crash and a short stoppage of trading today. Below is the chart courtesy of Jesse’s Amercain Cafe.
Our staff also puts together the daily top 20 ETF market movers by percentage change in volume for gainers, decliners and emerging volume.
Volume picked up on the first serious day of 2014 and breadth per the WSJ was negative.