The bloodletting continued around the world on Monday as the Dow, S&P 500 and Nasdaq all lost ground with the least damage amongst the larger cap exchange-traded funds or ETFs like (DIA) and (XLG) while the Russell 2000 ETF (IWM) was down 1.98%. European markets were down across the board with volatility up 9%. Asia was the worst hit with Hong Kong down 4% for the day and the stronger yen impacting big exporters like Toyota which was off 3.24%. The blue chip Nikkei 225 was down 3.3%. The U.S. dollar weakened against the yen by about 1% but held its own against all other major currencies.
The Malaysian ETF (EWM) was down 6.64%, Australia (EWA) lost 5.81%, the Powershares China (PGJ) lost 4.3% and the South Korean KOSPI index (EWY) was down 2.7%.
The big winners were of course the inverse ETFs that move opposite markets with the ProShares Ultra Dow Jones U.S. Real Estate ETF (SPS) up 7.39% for the day. SPS moves 200% opposite of the underlying index. U.S. real estate tracking ETFs were hit very hard again today.
At some point, prices will settle at levels sure to bring out the bargain hunters. According to the Financial Times, the cheapest stock market indexes on a price to earnings basis are Thailand trading at 9.5 times earnings, Brazil at 11.9 times, South Korea at 10.9 times, Germany at 13 times, Brazil at 11.8 times and the Netherlands at 11.8 times earnings.
By Carl Delfeld of the Chartwell ETF Advisor
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