Wall Street coughed yesterday, and Europe and Asia’s markets and exchange traded funds (ETFs) caught a cold.
After the Dow Jones lost more than 340 points, Europe’s FTSE-100, Germany’s DAX and France’s CAC all fell by mid-afternoon. In Moscow, reports Louise Watt for the Associated Press, the RTS benchmark was down more than 6% to lows not seen in more than two years.
Asia wasn’t immune, either. In Japan, the Nikkei 225 sank 2.8%, while the Hong Kong Hang Seng index fell more than 2% to its lowest point in more than a year. India, Australia and Singpapore also fell sharply.
Among the funds that track these major benchmarks are:
- NETS S&P/ASX 200 (AUS), down 20.4% since April 10 inception
- NETS Hang Seng China Enterprises Index Fund (SNO), down 21% since May 22 inception
- NETS CAC40 Index Fund (FRC), down 14.9% since April 16 inception
- NETS FTSE Singapore Straits Times Index Fund (SGT), down 8.9% since July 22 inception
Obviously, market turbulence is not just confined to U.S. borders, and international markets and ETFs are showing major signs of distress. The global benchmarks are enough to make any investor wince, with negatives across the board: iShares S&P Europe 350 Fund (IEV) is down 27.5%, while the FTSE China 25 Index Fund (FXI) has plummeted 43%.
These numbers make Gary Gordon at ETF Expert ponder if the bigger bear right now is financials or international. The U.S. credit crisis has penetrated much of the globe now. Remember that the dollar has been in recovery, and that a turnaround takes much longer than a crisis. Sit tight and stay tuned, and remember to be opportunistic on an international level. Here are some other numbers:
- Dow Jones Industrials: 21% off its high of Oct. 9, 2007
- S&P 500: 21% off its high of Oct. 9, 2007
- NASDAQ: 20.7% off its high of Oct. 31, 2007
Global ETFs:
- iShares MSCI South Korea Index (EWY), 46.9% off its Oct. 31, 2007, high
- Vanguard FTSE All-World ex US ETF (VEU), 25.5% off its Oct. 31, 2007, high
Financials:
- Financial Select Sector SPDR (XLF), 44.8% off its June 1, 2007, high
- iShares Dow Jones US Financial Services (IYG), 46.3% off its Feb. 20, 2007, high
- KBW Insurance Fund (KIE), 30.8% off May 16, 2007, high
Overall, it’s a tough call. Investors should protect themselves by staying out until the trend shows up again and these funds cross above their 200-day moving averages before getting back in.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.