Bloomberg reported that “Emerging market shares fell heavily on Friday as risk sentiment took a hit after dismal China and U.S. data reiterated global growth slowdown fears, adding to geopolitical and trade worries.”
The fall in emerging markets came despite the Dow Jones Industrial Average surging over 400 points on optimism that the United States and China would reach a trade deal. However, Asia markets were hit when China’s January producer prices slowed for the seventh straight month.
“The more concerning figure is the producer price numbers which is sometimes correlated with the Chinese profit numbers,” said Rob Carnell, Chief Economist & Head of Research, Asia-Pacific, ING.
“We’ve been running on a prospect of things looking much more promising…and now we still don’t know what’s going to happen,” Carnell said.
For investors looking for the continued upside in emerging market assets, whether driven by a weakening USD or continued developments around trade, the Direxion MSCI Emerging Over Developed Markets ETF (NYSEArca: RWED) offers them the ability to benefit not only from emerging markets potentially performing well, but from emerging markets outperforming developed markets.
Conversely, if investors believe that resolutions to the big issues impacting sentiment today are in motion, the Direxion MSCI Developed Over Emerging Markets ETF (NYSEArca: RWDE) provides a means to not only see developed markets perform well, but a way to access a convergence/catch-up in performance of DM relative to EM, a spread that has clearly widened over the past 6 months.
In the video below, Andres Garcia-Amaya, founder and CEO of Zoe Financial, and David Bahnsen, CIO of the Bahnsen Group, join CNBC’s “Squawk Box” team to discuss the broader markets. The panel touches on the Fed, China trade talks, emerging markets, and much more.
For more market trends, visit ETF Trends.