This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Global Macro: Developing Markets Diverge

NEW YORK ( TheStreet) -- There has been a flurry of data this week from around the world, as assets look to ascertain their future direction based on the new economic climate. U.S., Europe and China data have largely outperformed expectations this week, and it looks almost certain that the Federal Reserve will rein in asset purchases in the Fall of 2013. Below are various world assets' reaction to the news so far.

The first chart below is of iShares MSCI Emerging Markets (EEM). This index had a sharp drop as Chinese authorities failed to support spiking short-term lending rates, and the longevity of low-interest rates was called into question earlier this year.

These events factored into emerging market equities falling to multi-year lows. The ETF has since bounced off of support levels and began a strong upward trend.

U.S. economic data have proven extremely strong this week, from labor markets to manufacturing, the releases have confirmed that we are in a more stable growing environment.

It seems as if higher rates are outweighed by strong fundamentals for emerging markets. If this relationship holds true, improved data should drive this ETF to record highs.

The next chart is of iPath DJ-UBS Copper TR Sub-Idx ETN (JJC). Copper has been beaten down as a stronger dollar and lower growth projections from China have called into question world growth.

Although the metal is trading at multi-year lows, there looks to be a solid support base forming. As noted above, China and the U.S. have begun to show improved economic strength.

Copper has not had quite the same rebound as emerging market equities. However, continued economic success should be enough of a catalyst to push this base metal toward its highs.

The last chart is of CurrencyShares Australian Dollar Trust (FXA) over CurrencyShares Japanese Yen Trust (FXY). Although the Bank of Japan has embarked on an unprecedented amount of monetary stimulus, weak expectations and potential rate cuts have plagued the Aussie dollar.

The chart below shows just how drastic the selloff has been. The pair broke down from its peak beginning in the Spring of 2013, and is now in a downward spiral.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FXY $90.25 -0.35%
JJC $24.60 -2.03%
EEM $32.78 -0.03%
FXA $74.66 0.11%
AAPL $93.24 -0.41%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs