ripvanwinkle
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Joined: Jan 9, 2011 22:36:42 GMT -5
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Post by ripvanwinkle on Nov 12, 2018 21:30:57 GMT -5
On my way home today on the radio was a "market analyst" giving a few reasons why the market was down 602 points. One reason he said was the strong US dollar but didn't really elaborate at all on this. Can someone explain why a strong US dollar is bad or has a adverse affect on the market?
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oped
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Post by oped on Nov 12, 2018 21:44:27 GMT -5
More expensive exports... higher prices for multinational companies... I honestly think its a combination of things that are causing market volatility.
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Value Buy
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Post by Value Buy on Nov 12, 2018 22:28:07 GMT -5
The strong dollar is not the reason the markets are shaky. Strong dollar makes it easier to import things even with the tariffs tacked on. The economies of Asia and Europe as well as the more underdeveloped countries of South America are showing signs of slowing. Only our economy is still going well. This bodes poorly for our major industries to sell products overseas, hurting their earnings. Apple is a good example. It is thought they will sell fewer cellphones this quarter due to the slowing economies. This also means they sell less services they offer to the new cellphone crowd. no new cellphone, no new services contract. The FANG stocks are still selling off every week. As funds see their fund base (dollar value of theFang STOCKS IN THE PORTFOLIO) shrinking, they have to start selling some of their winners to compensate for redemptions, etc. GE screams trouble, and today a major American bank, Goldman Sachs, looks like they are caught with an Asian embezzler who stole billions from company funds or financial funds in Asia, hurting the bank stocks. I think things might straighten out after the conference in Asia this week.
Edited to add, midterm elections seldom make the stock markets fall, and talking heads do not expect it to happen this time. I am not quite that positive that is true. Fed interest rate hikes do affect the world stock markets. Europe and Asia cannot compete on interest rates as their economies will fall apart on higher rates. It also sends money to the states where people overseas are welling to earn 3 percent on their investments on a basically guarenteed return on investment. The same is true for investers here who fear a near term negative market in the states.
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