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Tuesday, March 15, 2011

Markets Across the World Tumble

Japan's devastating Earthquake, Tsunami, and now their growing nuclear crisis has caused a domino effect across major stock markets around the world. Additionally, with the crisis in Libya still continuing as Oil maintains high price levels, any growth that was expected this quarter might be permanently hindered by the combination of both events.

The Nikkei 225 fell more than 14% in mere days.
Source: finance.yahoo.com

The Nikkei 225 Index dropped more than 14% within a mere few days--a landslide in terms of market performance. Tokyo Electric Power dropped more than 24% just today. The numbers are indeed devastating for the Japanese economy, which is already set back by their enormous debt which is the highest for any industrialized, developed nation.

The Dow fell 1.71% during intraday trading (approximately at 1:30PM), while the Nasdaq and S&P 500 fell 1.72% and 1.68%, respectively. The FTSE 100 dropped 1.38% during trading. Oil fell 2.61% to settle at $98.55 per barrel--which is still considered a high price.

The Dow fell 1.78% during intraday trading (approximately 1:30PM).
Source: finance.yahoo.com

What does this mean for the global financial markets? For one, it certainly means that projections and forecasts will change for any corporation. Since many products rely on a long production chain that involves multiple countries cooperating, the disaster in Japan combined with high Oil prices will cause changes in these projections. Secondly, the bull market that the U.S. stock market experienced since Q4 last year to now may finally taper off and begin stabilizing.

However, there is some good news in all this. Many analysts believe that the crisis in Japan will finally lead to Japan's recovery from its decades long stagnant economy. Since money will be poured in to help the relief effort, one can expect construction, energy, and food supply & demands to also coincide with the relief effort. This may just be the catalyst for the beginning of a much better economy for Japan, which has experienced a slow, crawling economy for many years.

16 comments:

  1. one thing i have noticed after the huge decline in the early morning hours by almost the end of the day basic material companies had recovered significantly, FCX Freeport McMohan up almost 5% a copper and gold miner and Alcoa moved to being down .50% after being down 3%. Seems basic materials should be help over the next few months due to rebuilding in japan

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  2. a friend made huge amount of money with put options
    i think this is very sick and he has no moral whatsoever ;_;

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  3. things will get better, as soons as they can start rebuilding => work => money being spend => good for economy

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  4. a friend made huge amount of money with put options
    i think this is very sick and he has no moral whatsoever ;_;

    It's how the world moves...

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  5. the sad part is that this is just starting

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  6. we will see how this will end.

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  7. Didn't markets sharply rebound after Japan's previous massive earthquake? I can't seem to remember the name of it...

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  8. It's strange how chaos can lead to economic recovery..

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  9. everything always falls into place.

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  10. that's really kewl finding something positive in this.

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  11. Its abit said that this is the cause.... :-\ We should be supporting japan in everyway possible and coming out of their financial markets isn't going to help anything!

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  12. buy low i say... however i have no money to make said purchase ;)

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  13. so it looks like a good thing will come from this after all. nice

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  14. i dont think it comes off as much of a surprise

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  15. I think there must be something wrong with my blogger feed, this is from weeks ago but it was right near the top.

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