The Slide in Emerging Market Stocks

World stock markets generally moved together since 2009. Since late 2012, however, emerging market stocks diverged from U.S. stocks. U.S. and other developed market stocks generally rose, while emerging market stocks declined.

One reason for that is China’s economy slowed, and some fear it will slow further. But there’s more, says Sober Look. The blog says there are at least five reasons emerging market equities are declining while others aren’t. Retirement Watch readers benefit from this decline, because we’ve been holding MainStay Marketfield which has been selling short emerging market stocks with part of its portfolio.

Bloomberg: – Emerging-market stocks dropped to the lowest level in almost five months as Apple Inc.’s Asian suppliers retreated on speculation sales are slowing and concern grew that the global economy is faltering.

LG Display Co. slid the most in four months in Seoul after audio-chipmaker Cirrus Logic Inc. reported an inventory glut that suggests slowing iPhone sales. Jiangxi Copper Co. sank 2.5 percent in Hong Kong, while Russia’s Micex Index reversed earlier gains, closing at the lowest level since June 25.

Brazil’s Bovespa index rebounded from a nine-month low, as Gol Linhas Aereas Inteligentes SA jumped 11 percent. The MSCI Emerging Markets Index fell 0.4 percent to 997.33 in New York, the lowest level since Nov. 28. Stocks joined losses in the U.S. equity market as data on leading economic indicators and Philadelphia-area manufacturing trailed estimates. Earlier this week, the International Monetary Fund trimmed its global growth forecast.