“XME has already pulled back 15% from its recent high and poked up against its 50-day moving average. Given our broader market view, it would be surprising to see XME make new highs before pulling back more sharply, essentially in-line with the recent options market activity,” said MKM Partners in a note posted by Teresa Rivas of Barron’s.
The mining sector retreated along with the metals commodity Monday after China, the world’s largest consumer of raw materials, revealed exports dipped by 1.8% in April, compared to expectations of a 0.1% fall, and imports slumped 10.9% year-over year, compared to projections of a 5% contraction, CNBC reports.
Earlier this year, China announced the largest layoff in history as part of a shifting economic model to focus on domestic demand. The layoffs, though, could provide some relief to the beleaguered global steel industry and sector-related exchange traded funds.
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SPDR Metals & Mining ETF