INTERNATIONAL MARKETS: A Trojan Horse for Europe & Asia

International markets are trading on 3 key factors and several other points today. Turkey continues to weigh heavily, though after the Turkish central bank action and aggressive wording, it is lifting its neighbors to the west today. U.S. Fed action from Wednesday drove all markets lower to start Thursday, but then a strong American GDP data point lifted them back up. Direct measures of economic activity out of Spain and Germany are reflecting well for Europe today, save the black market notation. Two key markets are closed in Asia on the Lunar New Year. That Year of the Horse their ushering in might be an appropriate yet disappointing one, should that horse be a Turkish Trojan version.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

International Markets

EUROPE	9:54 AM ET	ASIA/PACIFIC	CLOSE
EURO STOXX 50	+0.4%	NIKKEI 225	-2.5%
FTSE 100	-0.1%	Hang Seng	-0.5%
CAC 40	+0.4%	S&P/ASX 200	-0.8%
German DAX	+0.2%	Korean KOSPI	NA
Athens ASE	+3.7%	BSE India SENSEX	-0.7%

ASIA Today

Markets are closed today in China and Korea for the celebration of the Lunar New Year – The Year of the Horse. Markets will be shut until February 7 in China and until the end of the week in South Korea for the celebration.

ASIAN MARKET ETFs	Today
iShares MSCI Japan (NYSE: EWJ)	-0.34%
SPDR S&P China (NYSE: GXC)	+0.91%
iShares MSCI Australia (NYSE: EWA)	+1.35%
iShares MSCI S. Korea (NYSE: EWY)	+0.97%
iShares S&P India (Nasdaq: INDY)	+1.91%

Asian stocks mostly fell on the day after the U.S. Federal Reserve pushed forward with its asset purchase tapering effort. Global investors are worried that the U.S. consumption economy could falter without the Fed’s extra efforts, after previous signs of such faltering. Basically, Asia just followed the lead of American shares, which dropped precipitously on Wednesday. Even as Asia develops its economies, U.S. and Europe continue to represent important sources of life for Asian business. Emerging markets have been in turmoil since the weak manufacturing report from China, which remains unsettling and unresolved.

The NIKKEI 225 was stripped bare as it fell 2.5% on the day. Japan is having its worst month in nearly two years. Shares of Toyota (NYSE: TM) and Honda (NYSE: HMC) are down about 0.3% each this morning in U.S. trading. However, American traded ETFs are up for most of Asia this morning, reflecting what is likely to occur in Asian trade Friday. The SPDR S&P 500 (NYSE: SPY) is bouncing back today on a solid GDP report and on strong earnings from Facebook (NYSE: FB) and others.

EUROPE Today

Look at those volatile Greek shares, as the Global X FTSE (NYSE: GREK) soars 2.8% after a very rough recent period. Greece is of course Turkey’s neighbor and deemed more closely tied to the Turkish economic turmoil than other euro-trash brothers. The Athens Stock Market Index (ASE) is higher by 3.7% at this hour, but the other indexes we follow here are relatively unchanged.

EUROPEAN ETFs	Today
Vanguard FTSE Europe (NYSE: VGK)	+0.04%
iShares MSCI U.K. (NYSE: EWU)	+0.12%
iShares MSCI France (NYSE: EWQ)	-0.07%
iShares MSCI Germany (NYSE: EWG)	+0.18%
Global X FTSE Greece (NYSE: GREK)	+2.79%

Still, European ETFs started the U.S. trading day much higher than they are trading at this hour, as the Vanguard FTSE Europe ETF (NYSE: VGK) chart shows. If we looked back before the U.S. market open and the good news about GDP, though, we would find a hump at around 8:30 AM ET. Europe started the day lower, similarly following the path of Asian shares on the U.S. Fed decision and American stock decline yesterday.

Chart at Yahoo Finance

Europe is still unnerved by Turkish and other emerging market issues. Turkey’s Borsa Istanbul 100 Index marked a 1.0% gain on the day, and the iShares MSCI Turkey (NYSE: TUR) is up 2.3% in U.S. trading after the Turkish central bank acted aggressively.

Spanish & German Data

In other news, Spain’s GDP grew 0.3% in the fourth quarter, as expected, but some estimates show the Spanish economy is growing faster in the shadows. The black market is now estimated to be roughly 25% of total economic activity, as distrust of government and distaste of taxes results from tough times. The iShares MSCI Spain (NYSE: EWP) was up 0.9% near noon in US trading.

German unemployment declined more than forecast in January. The number of unemployed declined by 28K in January, better than the 5K predicted, to 2.93 million. The unemployment rate stuck at 6.8% after adjustment to the December rate, where it marks the lowest rate in two decades. Shares of major German corporation, Siemens (NYSE: SI), were still down by 0.8% on the day.

The Year of the Horse is here. Let’s hope it doesn’t open and offer up a sour surprise.

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