Stocks

The ETF, MSCI Is A Longer Term Sell

The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund warned on Tuesday, adding that the outlook could darken considerably if trade tensions remain unresolved.

Earlier this week, the International Monetary Fund (IMF) said its latest projections for the world economy show 2019 GDP growth at 3.0%, down from 3.2% in a July forecast.  The main culprit was the US-China trade war which is expected to cut 2019 global growth to its slowest pace since the Great Recession. 

Although, the US and China reached a phase I trade deal last week, the IMF stated if deal isn’t reached in the near future, the slowdown in the world economy could worsen, case in point….China.

China’s growth outlook for the remainder of the year and into 2020 is expected to weaken further because of obstacles including drag from the ongoing trade war with the United States, analysts said.

The next mile marker in China’s economic slowdown will come on Friday, when the country reports third quarter growth. Analysts expect it to slow to 6.1 per cent from the 6.2 per cent rate seen in the second quarter, which was the lowest growth rate since the government started publishing quarterly gross domestic product (GDP) statistics in the first quarter of 1992.

But analysts are rapidly revising down their expectations for 2020 below the lower end of this year’s growth range. Most forecasts put next year’s growth between 5.5 per cent and 5.9 per cent, with the International Monetary Fund’s just-released projection at 5.8 per cent.

Source

The MSCI Emerging Markets Index stands for Morgan Stanley Capital International (MSCI) and is an index used to measure equity market performance in global emerging markets.   The MSCI ETF that tracks this index is heavily exposed to China.  So where is price of the MSCI ETF headed, lets go to the charts?

Monthly Chart (Curve Time Frame) - monthly demand is at $120.

Weekly Chart (Trend Time Frame) – the trend is still up, but momentum appears to be stalling.

Daily Chart (Entry Time Frame) – the chart suggests once the support breaks, to look for shorts to the down side with a first target at the weekly demand at $172.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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