Can some1 explain what is happening to the Stock Market and why, and how it affects the US and/or world?

Answer 1

dollar is dropping verses yen , euro and others . investors are moving huge sums overseas . NAFTA ,GATT ,wto 'forgot ' to put in strong provisions if countries don't balance trade by buying American goods , ie. china , we keep giving then treasury notes ,instead of insisting they buy something from us . if they decide to cash them in at once ,our economy crashes .also greed and huge federal deficit don't help things .

Answer 2

Several trends going on:

1) For the past two or two and a half years, there's been more money than places to invest, hence the boom in the housing market (prices being driven up), hence the tendency of hedge funds to buy interest in movie productions and marginal investments (prices being driven up), and hence the rise of the market (prices being driven up). Investors are becoming more sober at this point, and starting to sell what looks overinflated. This is an expected result.

2) Instability in the energy markets (particularly oil and natural gas) is a concern, though not very large in this instance. Compare this time period to the conditions about six months ago, when things were particularly volatile in Iran, and you'll see the market reacted much more strongly this time, which suggests that the impact of energy markets is secondary.

3) This is a period of decreased spending generally in the U.S. - consumption spending has sort of maxed out, and we're seeing a slowdown in some industries where consumption spending is particularly important.

Answer 3

Essentially, there are 3 major factors that determine stock values:

Expected future growth/cash flows
Interest rates
Expected volatility


Generally speaking, expected volatility and interest rates did not change in the US last week; but the large hit in Asian markets DID change expectations for growth.

With investors expecting slower growth, stocks decline. Of course, there is a type of "panic sell" involved in scenarios like this that do not seem rational at times.

Answer 4

Yea. The gas prices are climbing up again. It's sapping our investment capabilities. Worldwide.

Answer 5

i would need to lose all my hair to answer that question