Why retailers and emerging markets have reversed their trends



A trend in markets this year has been the poor performance of last year’s stock market winners, and the resilience of some of last year’s losers. Russ takes a look at what’s behind this trend, specifically with retailers and emerging markets.

This year, the parts of the market that are struggling are generally those that ran up the most in 2013: biotech (IBB), internet companies, and U.S. retailers.  Conversely, some of last year’s worst performers are proving more resilient. Case in point: some emerging markets.

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Market Realist – Retailers and emerging markets have reversed their 2013 trend this year

The graph above compares the price performances of the retail sector as tracked by the SPDR S&P Retail ETF (XRT), India as tracked by the Wisdom Tree India Earnings Fund ETF (EPI), and China as tracked by the iShares FTSE/Xinhua China 25 ETF (FXI) since 2013.

Retailers had a stellar 2013 with a return of 41.2%, whereas China and India lost 5.1% and 10%, respectively. This year, the retail sector has been flat, whereas India has given returns of 33.6%, while China has given returns of 4.3%. Both the retail sector and emerging markets have reversed their trends. Internet stocks like Amazon (AMZN) have also suffered a similar fate.

Please read the next part of the series to understand why the retail sector could continue to underperform.


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