Thursday's stock-market slump had driven traders around the world to flee equities for the safety of fixed income investments.
When those are bought, the seller is taking in dollars that will either be used to purchase U.S. exports (we remain the largest exporter in the world) and equities, or exchanged with others who desire what we make and issue.
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Likewise, the bear market in equities in the developed world has wiped out trillions of dollars in valuation, resulting in rising savings rates as consumers, especially those close to a wanted retirement, try to repair their leaking balance sheets.
The economies in the developed world are taking a toll on equity markets around the world, with the high beta emerging market equities getting crushed.
Some now argue that it's a cause of financial instability as the international super-rich shift their wealth around the world, increasing volatility in the price of gold, equities, government debt or basic commodities such as copper and grain.
Stocks were sliding into the last hour of trading on Wall Street on Monday, with investors abandoning equities as worries about the state of the world financial system consumed them despite the historic U.S. bailout instituted last week.
Perhaps the biggest damage that comes when returns from equities are overestimated is that investment, and hence growth, in the world economy gets crimped.
At a World Economic Forum meeting in Singapore, Yam proudly quoted Barton Biggs, chief global equities strategist for Morgan Stanley Dean Witter, as saying he had "come around" to agreeing with Hong Kong on the intervention.
Investors sold stocks around the world and once again Monday is shaping up to be another bad session for North American equities in line with sliding European bourses.
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Even though economies appear to be recovering around the world, there is still a high degree of fear and uncertainty regarding the outlook for equities as we move into the new decade.
That would mean more yuans traveling the world to buy up everything from higher yielding Brazilian and Turkish debt, to U.S. equities and Treasury bonds.
However, should the global gloom lead to a drop in world commodity prices in the months ahead, market bearishness towards Russian assets should justifiably rise, driving equities into deeper into a hole they have been stuck in all year.
Citigroup Middle East and Africa equity strategist Andrew Howell pegs the region's correlation to world markets at about 40%, which means the GCC is unlikely to follow U.S. equities' downward trend.
Analysts said uranium equities are falling because the market had been pricing in strong growth in demand as countries across the world plan to build new fleets of nuclear power stations to manage their energy needs.
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