When the world’s largest economy sneezes, many countries may catch a cold. Wall Street ended last week on a very bad note. It was the worst performance since late 2008. (That was when the sub-prime crisis happened, remember? When the banks lendings and speculative activities got too ‘crazy.’
All these are contributing to the worst week for the past decade. The selling was due to worries over trade wars and a possible government shutdown. (It has since been announced that there will indeed be a government shutdown because President Trump did not manage to get his budget for the border wall on the border with Mexico to be approved. He threatened to shut down the government if his plans were refused. It was. Article in NST.com.my here.
Thus, This will thus be happening: 380,000 federal workers will be put under compulsory unpaid leave and another 420,000 would have to work through the holidays unpaid. About a quarter of government functions ceased for lack of funding. On Saturday the Senate adjourned without a solution, ensuring the shutdown will continue until Thursday at the earliest. Article in TheGuardian.com here.
Statistically, The Dow Jones Industrial Average finished with a loss of 1.8 per cent or more than 400 points, at 22,445.37.It had lost nearly 7 percent within one week. taking losses for the week to nearly seven per cent. Broad-based S&P 500 slumped 2.1 per cent to 2,416.58, while the tech-rich Nasdaq Composite Index slid 3.0 per cent to close at 6,332.99. All these pushed Nasdaq into a “bear” market, meaning a retreat of 20 per cent from its peak. Article in NST here.
Bursa has not fared well too. However, shares on Bursa Malaysia closed higher as at end of Friday (21st Dec) because of window dressing Tenaga, Petronas Dagangan and Sime Darby Plantation emerging among the top gainers. If we intend to enter the stock market, buy some undervalued stocks and just hold, I think this may just be that window of opportunity. Happy investing.
written on 23 Dec 2018
Next suggested article: RM4,000 is equivalent to an additional RM70,000 worth of property.
Leave a Reply