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Investing Overseas is for Everyone
Every investor should be invested in foreign stocks. Easy ways to invest overseas include index-based stock funds, exchange traded funds, ADRs and picking a portfolio of foreign stocks.
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FINANCIAL MARKETS SUMMARY for the WEEK ENDING 6/06/08
US financial markets ended the week with a thud. The DOW INDU fell nearly 400 points today,it's biggest 1-day drop since February 2007. The other broader indices such as the NASDAQ and the S&P 500 also fell sharply.
There were two major pieces of economic news that set-off this major selloff.
First,the US unemployment rate rose a full 1/2% from 5% to 5 1/2%. This was the largest one month jump in the unemployment rate in 22 years! This sparked fears of greater weakness in the US economy than Wall Street had anticipated. The perception is that the US Federal Reserve may have to lower interest rates even more to help the US economy.
The thought that the Federal Reserve may have to lower rates again sparked a renewed and sharp selloff in the US dollar. The US dollar selloff was exacerbated by the 2nd piece of news - remarks yesterday by the head of the European Central Bank(the equivalent of our Federal Reserve). He,in effect, said that the US Fed is 'mis-guided' and that interest rates should go higher because of inflation. He strongly hinted that European rates would be climbing again soon and this put additional pressure on the US dollar.
This sharp fall in the US dollar re-ignited the rally in commodities with a vengance. On Friday,all commodities rose sharply. Oil led the way with its biggest 1-day rise ever,jumping about $10.50 per barrel to a record high! Other commodities also went up sharply - precious metals like gold, industrial metals like copper, and all the grains -- corn,wheat,soybeans,etc.
These market events do touch everyone. If you have any questions on how these events can effect your family or how to invest in these turbulent economic times, please feel free to contact me at any time via email or through our forum with your investing and/or economic-related questions. Remember, I'm here to help you!
Tony Daltorio, Investing Editor
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