There‚Äôs only been five days of trading so far in 2014, but for emerging market equities and for China, the year has gotten off to a very bad start.
The latest declines in both the iShares MSCI Emerging Market ETF (EEM) and the iShares FTSE China 25 Index (FXI) have sent these respective indices below their long-term, 200-day moving averages. This technical development doesn‚Äôt augur well for the trend in these sectors, at least in the short term.
EEM is down nearly 5% so far in the young year and, despite a rebound in today‚Äôs trade, FXI also is down about 5%. While these sectors are dealing with a variety of different challenges, there is a common thread to the headwinds, and that thread is debt.
Read more about why 2014 has started slowly for China and emerging markets at Eagle Daily Investor.