— Charlie Bilello (@charliebilello) July 26, 2021
Today’s Chart of the Day was shared on Twitter by Charlie Bilello (@charliebilello). It’s a ratio chart of the China ETF, $FXI, vs. the S&P 500 over the past 16-years. Chinese stocks have continued to slide, with $FXI hitting fresh lows relative to US stocks today. As you might know, a lot of Emerging Markets funds are heavily weighted towards Chinese stocks. So, This recent weakness in China is taking its toll on Emerging Markets. $EEM, for example, is also hitting fresh lows relative to the S&P 500. Going into 2021, $EEM was one of the more hopeful trades, as it was breaking out for the first time in over a decade at the time. If Chinese stocks don’t stabilize soon, Emerging Markets will likely continue to be under pressure.