surf1944
15年前
China, Mining ETFs Lead Market South
Companies:Ishares Msci Emerging Markets IndexIshares Ftse/Xinhua China 25 IndexUltrashort Ftse/Xinhua China25 Proshares Related Quotes
Symbol Price Change
EEM 41.61 -0.16
FXI 40.53 -0.61
FXP 8.96 +0.23
GDX 45.47 -0.26
GLD 108.60 -0.34
{"s" : "eem,fxi,fxp,gdx,gld,uup","k" : "c10,l10,p20,t10","o" : "","j" : ""} Trang Ho , On Wednesday January 20, 2010, 6:14 pm EST
China and mining stocks led world markets lower Wednesday on news that the world's largest country is tightening lending standards, which could slow economic recovery.
The most widely traded China ETF, iShares FTSE/Xinhua China 25 Index (NYSEArca:FXI - News), gapped down 3.5% to 41.27 in strong volume. The grouping of the 25 largest stocks listed in Hong Kong undercut prior support at 41.04 but closed near the top of its intraday range.
The ETF has formed a bearish chart pattern with two lower lows and two lower highs since hitting a 16-month high of 46.66 in mid-November.
Since its mid-November 52-week high, FXI has fallen 12% and has drastically underperformed its benchmark, as tracked by iShares MSCI Emerging Markets Index (NYSEArca:EEM - News).
FXI's Relative Strength Rating has eroded from 75 to 50 over the past two months and its Accumulation/Distribution has dropped to E -- the lowest possible. By contrast, EEM has 70 RS and D Acc/Dis Ratings.
FXI is overvalued and vulnerable to further corrosion because of its heaving weighting -- 46% -- in financials, which are suffering from the clampdown on lending, according to Carl Delfeld, founder of ChartwellETF.com, who specialized in foreign ETFs.
China real estate prices soared nearly 8% in December from a year earlier. China's government is trying to prevent a bubble by making it harder to borrow money. Housing costs in major Chinese cities have exploded to 15 to 20 times average household income. In Japan's economic bubble, housing peaked at 12 to 15 times average household income.
In addition, stock prices have gotten ahead of fundamentals. China's market trades at 50 times its average 10-year earnings, whereas the U.S. market has a price-earnings ratio of 15, Delfeld noted.
Delfeld is recommending his clients buy ProShares UltraShort FTSE/Xinhua China25 (NYSEArca:FXP - News), which goes up twice as much on a daily basis when FXI goes down. He advises setting a 5%-8% stop-loss on the trade to control risk.
Gold Miners Down Nearly 5%
China's action and a rising dollar pummeled miners and commodities on fears that slower growth will dampen the country's robust appetite for materials.
"If China is curtailing lending, then it is reasonable to expect that buying of commodities by the Chinese will stop, and further it is reasonable to expect that some liquidation on the part of inventory holders shall begin to assert itself," Dennis Gartman, an independent market analyst and publisher of the Gartman Letter, wrote in a note to clients.
Market Vectors Gold Miners (NYSEArca:GDX - News), the most heavily traded materials ETF, plunged 4% to 45.76 in robust volume. The ETF has dropped sharply below its 50-day moving average, but may have found support near its prior low at 44.80.
SPDR Gold Trust (NYSEArca:GLD - News) gapped down 2.3% to 108.95, falling below its 50-day moving average. It's tumbled 8.9% from its all-time peak of 119.54 reached Dec. 3. Its RS Rating eroded from 56 to 45 since then.
PowerShares DB US Dollar Index Bullish (NYSEArca:UUP - News), which tracks the dollar against a basket of the most widely traded currencies, gapped up 1.2% to 23.12 in heavy turnover.
It faces prior short-term resistance at 23.20. It's crossed above its 50-day moving average after hitting a 16-month low in November. But it's still trading below the longer-term 200-day moving average.
EquityTrader
16年前
China export slump brings down giants
---Its articles like this that makes me think FXP is a killer investment right now---
Updated Tuesday, December 30, 2008 10:20 am TWN, By Fang Yan, Reuters
SHANGHAI -- Never mind the banks. Eastern China's Shaoxing county has launched a massive polyester bailout. The locality of 710,000 in prosperous Zhejiang province arranged 1.5 billion yuan (US$220 million) in aid to let Zhejiang Hualian Sunshine Petro-Chemical Co, a major producer of purified terephthalic acid (PTA), used to make polyester, restart output after financial difficulties had shut it down.
The virtually unprecedented offer of government money to a non-state firm highlights how far the global economic downturn has spread, from small exporters that bore most of the initial brunt to bigger companies in more basic industries.
“We had to bail out Hualian Sunshine even though it was privately held,” a Shaoxing municipal government official, who declined to be named due to briefing rules, told Reuters.
“Hualian Sunshine is the biggest supplier to our textile industry, which gives us half of our fiscal revenue. The stakes were just too high for us to sit there and let it die.”
Signs of problems with China's export-driven economy started in the coastal south, where hundreds of small-scale toy makers and garment firms were forced out of business as the global financial crisis battered their main markets in Europe and the United States.
Many had initially blamed currency appreciation. But anemic annual growth of 5.4 percent in China's industrial output in November, the worst reading in nearly 10 years, showed the problem has gone far beyond the yuan's rise, which anyway came to a virtual halt in mid-July.
A number of upstream suppliers in eastern China's industrial heartland, such as Sinopec Yizheng Chemical Fiber Co and Nanjing Chemical Fiber Co, slipped into losses in the third quarter as their order books dried up.
One hard-hit industry has been chemicals, including makers of polyester, a synthetic resin widely used in clothing and a variety of plastic goods.
“Due to the severe situation facing the downstream business and slowing demand, the domestic polyester industry is in an extremely difficult operating environment,” Sinopec Yizheng said in its quarterly financial report.
That reflects a severe slowdown in exports of clothing and accessories, which grew just 3.1 percent year-on-year in the first 11 months of this year compared with a 22.2 percent rise in the same period of 2007, official data showed.
Industry analysts expect the situation to get worse next year along with the faltering global economy, forcing some smaller suppliers out of business.
“It's a domino effect. If the garment exporters continue to fall one after another, how can you expect their upstream suppliers to stay in the business?” said Gao Guo, an analyst with Huatai Securities.
“Industry-wide consolidation is inevitable next year as there is no sign of an end to the global financial crisis.”
A China Union spokeswoman said Hualian Sunshine halted production in early October but was able to restart about a month later after the bailout, which included funds from the county and another local company.
In recent months, Beijing has unveiled a series of measures, including export tax rebates for exporters of textiles and other goods, as well as a 4 trillion yuan fiscal stimulus package and repeated interest rate cuts.
The central government is determined to maintain at least 8 percent economic growth in 2009, a level it said it must achieve but which foreign economists have said could prove elusive.
http://www.chinapost.com.tw/commentary/reuters/2008/12/30/189819/China-export.htm
EquityTrader
16年前
From my post at the SKF...(Ultrashort Financials) - which had a KILLER DAY.
Kill the autos...they don't know how to run a business. Yes, I feel sorry for all the people who will lose jobs, but they've been overpaid for so long.
Remember this:
The German automaker then known as Daimler-Benz paid $37 billion for the U.S. automaker in 1998, but it soon found itself weighed down by uncompetitive labor costs and lost sales to nimbler Japanese rivals.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
So, Daimler lost $30 BILLION...more than what the autos are asking for. Let them fail...just like the airlines, there will be another Southwest who will come in and do business better (and for less).
Cashed out of SKF at the close (tripped my sell order)...made 100%!!! I'm going to buy FXP (UltraShort China) - which is low priced and can have a heck of a run from here.
http://pub18.bravenet.com/forum/1532764112