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.