U.S. stocks followed the pattern of other world stocks as they dropped a good amount today. The cause in the fall is due to increased tension between Ukraine and Russia. However, as the day wore on, the market was able to recover some, so not all hope was lost. The dow ended the day down 154 points, or roughly 1%. Earlier, the blue chip index had lost as many as 250 points. Investors were cautious following news that Russia has moved forward with military intervention in Ukraine. Ukraine's new leaders have accused Russia of declaring war. Investors seemed to be very concerned by threats of serious sanctions against Russia from the United States and Europe. Russia's central bank reacted by hiking interest rates, saying it wanted to maintain financial stability and inflation levels as market volatility increases. However experts say that while Ukraine's problems may raise more concerns about emerging markets, he doesn't expect the crisis will trigger another global recession. Rather, Green said the situation will be limited to Russia and Ukraine.
http://money.cnn.com/2014/03/03/investing/stocks-markets/index.html?iid=mkt_SF_news
Even though Ukraine joins the EU, they have their own economic crisis going on, still unsolved. Moreover Ukraine loses of their largest trading partner - Russia. Since the USA and Europe are putting up on sanctions, it is indeed a very difficult situation for Ukraine. The war was going on for a while and also the economy is not positive at the moment as well.
ReplyDeleteThe rising tensions between Russia and the Ukraine has and will continue to effect world stocks until the conflict is resolved. Threats from the United States and other European countries will lower investors confidence due to uncertainty. I think that the Russian central bank made a wise move by hiking interest rates to adjust to inflation. Tensions between these countries will continue to effect world stocks, I however do not believe that this crisis is large enough to trigger a global recession. As of right now I would not recommend investing in world stocks.
ReplyDeleteCurrently, many are seeing these events as signs of an upcoming war, causing a lot of uncertainty in all markets. If another World War to arise, it would be disastrous for many economies, and people wouldn't want to lose money. They would pull their money from stocks, leaving the country with less funds. Russia's stocks had dropped when troops were sent into Crimea, forecasting what would happen for every country if a war really were to begin now.
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