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Emerging markets brief

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China's manufacturing data recovered somewhat in July, climbing to a five-month high of 49.5 compared to 48.2 for the previous reading in June and giving nervous emerging markets a bit of confidence that not everything in the global economy is bad.

Image courtesy Willie Cloete: http://www.sxc.hu/profile/Pulpdtp

A macro number like that would normally set the emerging markets bulls running, but the latest euro zone crisis has distinctly dampened the mood.

It is also important to note that the driving factor surrounding the manufacturing bounce in China is a matter of stimulus -- can it hold up without Beijing involved?

Either way, only the Japanese and Hong Kong markets ended the day lower. Hong Kong's markets delayed their opening until the afternoon due to typhoon Vicente that briefly became a level 10 storm briefly, the strongest named storm to hit the territory in 13 years.

Indian stocks were able to break the downward move, although the last two sessions leave the NIFTY near the lowest level in 4 weeks. The country's investors are becoming concerned that the recently elected incoming president may not be able to deliver on a promise of extensive policy reforms.

India's markets continue to be dragged down by pharma, technology and capital goods sectors while leadership can be found in its financial and energy sectors.

Companies to watch

China's CNOOC ( CEO , quote ) fell 4% in Hong Kong a day after announcing a $15.1 billion cash deal to buy Canada's Nexen. The drop was a little less than the U.S. ADR, so traders could see the ADR readjust at the open.

Today's key economic data:

Last night's numbers from China kick off a series of critical key economic data release through the end of the week.

08:30 a.m. EDT CAD Core Retail Sales (MoM)

08:30 a.m. EDT CAD Retail Sales (MoM)

08:45 a.m. EDT USD Fed Chairman Bernanke Speaks

06:45 p.m. EDT NZD Trade Balance

09:30 p.m. EDT AUD Trimmed Mean CPI (QoQ)

09:30 p.m. EDT AUD CPI (QoQ)

04:00 a.m. EDT EUR German Business Expectations

04:00 a.m. EDT EUR Italian Consumer Confidence

04:00 a.m. EDT EUR German Current Assessment

04:00 a.m. EDT EUR German Ifo Business Climate Index

04:30 a.m. EDT GBP GDP (YoY)

04:30 a.m. EDT GBP GDP (QoQ)

Commodity Marker - Electronic Trading

Crude oil $87.95 -0.19 -0.22%
Nat Gas $3.099 -0.018 -0.58%
RBOB-Gasoline $2.8551 -0.0278 -0.96%
Brent Crude $103.01 -0.25 -.024%
Gold $1,572.00 -5.40 -0.34%
Silver $26.845 -0.197 -0.73%
Copper $3.364 -0.0175 -0.52%
U.S. dollar index 83.98 +0.165 +0.20%
as of 7:10 a.m. EDT

Precious metals corner

Market update: Gold and silver both traded lower as the money flowed in the U.S. dollar on fear turning to panic as Greece re-enters headlines looking for more bailout money while at the same asking for agreed cut backs in spending be delayed. Comments from Germany suggesting Greece needs to meet obligations or exit the euro zone sent panic into the markets and help the precious metals to recover more than half of the day's session of losses.

ETF holdings

Market update: Holdings in the world's largest gold-backed ETF, the SPDR Gold Trust ( GLD , quote ) held at 1,254.64 tons as of July 23 from the previous trading day.

Market update: The iShares Silver Trust ( SLV , quote ) jumped to 9,708.78 tons on July 23 from the previous trading day. SLV is the world's largest silver backed ETF.

Fundamental outlook

Market update: Gold and silver are likely to trade within a tight range as market participants wait and see the faith of Greece along with Spain. Markets will also be focusing on the Fed Chairman Ben Bernanke's speech later today for any signs of a softening stance on QE3.

Looking at the pre-market we find:

Pre-markets are quiet today, with volume activity in the following ADRs:

WIT WIPRO ADR

SAP SAP AG SPON ADR

ICLR ICON PLC-SPONSORED ADR

Upcoming earnings in the Emerging Money Index

HXM HOMEX DEVELOPMENT July 24 After the bell
ITUB ITAU UNIBANCO HOLDING July 24 Time unspecified
VALE VALE S.A. July 25 Time unspecified
TEVA TEVA PHARMACEUTICAL INDS LTD July 25 Before the bell
BIDU BAIDU INC July 25 After the bell
UMC UNITED MICROELECTRONICS July 25 Before the bell
VALE VALE S.A July 25 Time unspecified
YNDX YANDEX July 26 Before the bell
ERJ EMBRAER S.A July 26 After the bell
PBR PETROLEO BRASILEIRO July 27 Time unspecified
ABV COMPANHIA DE BEBIDAS July 31 Before the bell
MELI MERCADOLIBRE INC August 1 After the bell

Bottom line: Emerging markets will be focused on key economic data as well as developments over Greece and Spain's much-needed bailout. With Spanish two-year bonds now over 6.6% and 10-year bonds yielding 7.6%, the cost to for Spain to borrow money is no longer becoming a problem but is now real. This is a real problem for the ECB if Spain needs the full bailout amount promised. Look for risk aversion to continue and money flowing into defensive names.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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