Friends
Well that was quite a reversal! Stocks sold off hard this morning with the Dow down as much as 277 points by midday, but in the afternoon portion of the trading session share prices clawed their way back into positive territory. The culprit overnight was once again the currency struggles in China. As these currencies around the world race to the bottom, U. S. goods abroad become more and more pricey. All of a sudden travel to the U. S. becomes more and more expensive for foreigners. So yes, the U. S. consumer benefits from a stronger dollar and lower commodity prices, but U.S. corporations that sell abroad continue to be hurt by devalued foreign currencies.
As for today, by the close the Dow Jones Industrial Average was basically flat finishing the day at 17,402. The S&P 500 was up 2 points to close at 2086. Gold was up $15 to trade at $1123 per ounce, while oil was up $.30 to trade at $43.38 per barrel WTI.
Somewhat out of the blue, this week’s focus has been squarely on China. No doubt, China’s economy is very important to the world economy, but the extreme reactions by markets to moment to moment news is counter-productive to long term investment plans. Today’s currency issues in China are not likely to have much of an effect on one’s 30 year retirement plan. Of course, if opportunities arise from disruption, we’ll take it.
Have a nice evening everyone.
