The Direxion Daily FTSE China Bear 3x Shares ETF (YANG) is experiencing significant downward pressure due to a combination of economic and regulatory factors impacting Chinese markets. On December 9, 2024, China's November Consumer Price Index (CPI) inflation data revealed a slowdown to 0.2% y/y, the lowest since June, indicating persistent deflationary pressures. This unexpected easing in inflation, driven by a slowdown in food prices and continued softness in non-food prices, has raised concerns about demand weakness in the Chinese economy. Additionally, Chinese stocks closed mostly lower, with the Shenzhen Composite Index falling 0.35% and the ChiNext Price Index dropping 0.8%, reflecting the market's reaction to the weak inflation data.
Further compounding the situation, Nvidia shares came under pressure after the Chinese State Administration for Market Regulation announced an investigation into the chipmaker for potential antitrust violations. This development adds to the ongoing tensions between the U.S. and China over chipmaking capabilities, with recent U.S. restrictions on semiconductor sales to China. The regulatory scrutiny and geopolitical tensions are contributing to a cautious sentiment among investors, affecting the broader Chinese market.
The YANG ETF is down 20% in pre-market hours on Monday, December 9, falling to $60.60 as of 8:46 AM ET.