During March, Russian and Chinese asset prices were affected by geopolitical conflict and declining economic growth. Russia’s actions in Crimea elevated economic uncertainty, prompting a consideration of sanctions by the international community and an increase in interest rates by the Russian central bank. As a result, Market Vectors Russia ETF (RSX) has been down by as much as 20 percent and the ruble has seen significant weakness against the U.S. dollar.
Chinese markets made the news in March as Bank of America cut GDP estimates because of weaker-than-expected economic reports. Real estate and construction, which have been China’s significant economic drivers, experienced negative growth rates this year. Setting a new precedent, Premier Li Keqiang says that his focus will be stabilizing growth and preventing inflation instead of meeting growth targets. As a result, iShares MSCI China ETF (MCHI) is down over 9 percent since the start of the year. However, Keqiang’s goal of creating a sustainable economy should prove beneficial in the long run.
clearTREND offers monthly market analysis and research on any individual stock, mutual fund, or economic sector, including markets in Northeast Wisconsin. This April, we are showcasing the health insurance and banking sectors of the economy. Also featured are the largest employment sectors for Fond du Lac County and current trend analysis on select companies headquartered in Wisconsin.
This month’s clearTREND U.S. Economic Health IndexTM shows that 71 percent of U.S. sectors are expanding, a favorable read on the overall U.S. economy.
“Weakness in emerging markets hasn’t had a large impact on U.S. markets quite yet,” says Mark Scheffler of The Appleton Group. “However, due to our dependence on trade with countries all over the globe, any disruption internationally will eventually reach U.S. markets as well.”
Click here to view this month’s economic data in our digital issue.