Monday, April 14, 2008

Stock melt down is more in the rest of the world than in US

Stock investors have been scouting for the third world or the Asian Markets whenever the US stocks get the beating. This is what is called as “decoupling” in the stock market parlance. But the recent stories tell the facts contrary to the established one. As the US is gripped by recession, its effect is more felt in the third world, so to say, some sort of chain reaction where the starter suffers the least whereas the tail end suffers the worst.

China and India, considered as the outstanding performers in terms of GDP growth, have suffered the most in stocks, in terms of the decoupling theory.

Mr. Jamie Doyle, manager of the International Portfolios for Causeway Capital Management considers the recent drop as buying opportunity, going by the adage “Invest at every dip”. However, he cautions the investors with minimal exposure to the American economy.

GE results, well below what the market had expected?

The results of the General Electric company is officially out and has sent chills through the nerves of the investors who are more worried about the performance of the market especially during the start of the first quarter of the financial year. The company reported the first quarter earnings per share of 44 cents, which was considered well below that of what Wall Street considered as the ideal one at 51 cents and a cut in its growth forecast.

GE recorded the steepest weekly fall since the September 2001 terror attacks after the release of the result. Estimates showed that the plunge had erased 55 billion dollar from the stock market value. The majority of the economists are of the opinion that US will be into recession sooner. The confidence among the US consumers has gone down to a 26 year low and high gasoline prices and the worsening labor market are cited as the possible reasons.

Non financial news
A cluster of spruces in the mountains of western Sweden is considered as the oldest living tree, at an age of 8,000 years!

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