SPDR S&P 500 ETF (NYSEArca: SPY) is knocking on the door of its all-time high and the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 10 days in a row heading into Friday. However, China ETFs falling to their lows for the year could be sending an overlooked warning signal on the strength of the global economy.
The iShares FTSE China 25 (NYSEArca: FXI) was on track for a 4% weekly decline in afternoon trading Friday.
The Chinese ETF dropped below its 200-day exponential moving average on Friday. [Should You Listen to Copper ETF’s Warning?]
“China’s stock market tumbled to three-month lows this week on worries the government will do more to control property price increases and economic data showed economic recovery in the world’s second-largest country losing steam,” reports Trang Ho at Investor’s Business Daily.
FXI is down about 7% year to date. [China ETFs Tumble on Home-Price Curbs]
Turning back to the major U.S. stock indices, the S&P 500 was on track for a weekly gain of 0.6%, the Dow added 0.7% and the Nasdaq Composite climbed 0.3%. All three benchmarks were slightly in the red for the session on Friday afternoon.
“I don’t think that one or two days’ movement is really going to change the underlying momentum of this market, which I still think is pretty strong at this point,” said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors, in a Reuters report.