U.S. stocks were on edge this morning, as investors remain relatively pessimistic about the start of the second quarter earnings season. U.S. cynicism combined with continuing Euro Zone drama have understandably spooked investors, causing equities to slide into their third day of declines. After a slew of sour economic reports last week, markets were once again bombarded with less than cheery news from overseas. With the slowdown of powerhouse China’s economy as well as several other European countries, investors will continue to keep a close and cautious eye on how these macroeconomic events will impact U.S earnings [see also Seven Simple & Cheap ETF Model Portfolio].
Perhaps the biggest headline this morning was the announcement of the Chinese consumer and producer price indexes. China’s CPI came in at 2.2%, showing the most significant decline in inflation levels in over two years. The PPI also declined in the month of June, falling 2.1% after dropping 1.4% in May. Despite the positive news, Asian markets remained broadly lower after Premier Wen Jiabao said over the weekend that there was “huge” pressure on the Chinese economy [see also What Is Deflation? The ultimate Beginner's Guide].
Below we outline one ETF that has been impacted by today’s major headlines:
State Street SPDR S&P China ETF (GXC)
Continuing concerns surrounding the slowdown of China’s economy pushed this ETF even lower today despite the announcement of seemingly positive inflation data. GXC gapped significantly lower at open, only to tumble even lower throughout the morning. Currently GXC is down 1.56% (as of 11:46 AM July 9, 2012) [see also Asia-Centric ETFdb Portfolio].
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Disclosure: No positions at time of writing.