Friday, October 17, 2014

Europe's Woes Continue

The Eurozone had another rough day yesterday, with its benchmark index, the Stoxx Europe 600, dropping to a ten-month low. Most of that damage has happened recently, with the index down by more than 10 percent since the middle of September.

One of the biggest concerns now is that Europe is risking deflation, which would be very dangerous for stock prices. September's inflation rate in the Eurozone was just 0.3 percent, far below the target of 2.0 percent.

The fear among American investors is that problems in Europe will once again have a bearing on stocks here at home. In the globalized economy, that's almost inevitable. The main part of our Web site has a new article, "The Global Village," describing how and why the two markets are connected, and how investors can protect themselves. I encourage you to give it a read.

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