A Closer Look At World Market ETFs
Alhambra Investment Partners, LLC | Feb 01, 2016 01:59AM ET
Throughout October, the S&P 500 Index (N:IVV) rebounded remarkably from the lows made in late August, breaking above both moving averages and getting close to new all-time highs. After a volatile but stagnant final two months of the year, in which the market straddled the moving averages with no clear direction, the index once again broke down in early January, before stabilizing at the 1867 low set in August 2015. Look for a rebound, maybe to the 50-day MA at the 2000 level. The S&P 500 is down 5.0% year-to-date after posting a gain of just over 1% in 2015.
The EMU Index ((N:EZU)), or the European Economic and Monetary Union, fell more gradually over a longer period of time when compared with its US counterpart. And it never recovered with the same ferocity. Europe has been consistently underperforming the US for some time now, after outperforming for the first part of last year. The index is down 5.25% for all of 2016.
After a huge “irrationally exuberant” run into April, the Chinese markets ((N:FXI)) plunged over 35%, breaking both long-term MAs. It had been trading within a range since then, and once again broke down in late December after being unable to break through the top end of its trading range. The China Large Cap index is now down 11.59% in 2016.
A stronger US dollar, ISIS, and crashing crude oil prices are just a few of the things the Middle East Index ((O:GULF)) has to contend with. The supply of crude oil is probably the biggest driving factor of this market, and that is still a net negative for the index, especially with Iran coming to the market soon. The index is down 7.69% since the beginning of the year.
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Another region hit hard by the commodity bust. The Latin American market ((N:ILF)) broke down in May and August of last year, and again in the last few weeks after trading in a range for a few months. It now finds itself below strong support at the 21 level. It has moved concurrently with the crashing commodities market and is still struggling to hold any support. The index has recorded a loss of 3.16% this year.
Africa’s market ((N:AFK)) has been hurt by continued upheaval in Northern Africa and Nigeria, coupled with a weak global economy and a worsening political climate in South Africa. It is down 7.14% for 2016 after a tough summer and a horrendous 4th Quarter.
Technically, Japan ((N:EWJ)) is holding up pretty well, having held support at the 11 level. News of the BOJ adopting a negative interest rate policy should do wonders for the stock market. Japan is down 5.12% YTD, after being the best performing market in 2015.
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