The Week That Was

The Week That Was

Each of the indices I track ended squarely in the red last week as negative news reports – corporate and economic – and large currency moves sent investors fleeing stocks.

The Chinese Yuan devaluation, disappointing Chinese manufacturing numbers, and poor earnings coupled with reduced forecasts from American blue chips Deere and HP were among the negative news bites which sent investors bailing out of stocks and seeking safety in treasuries.

On a more positive note, Germany’s DAX, France’s CAC 40 and Japan’s Nikkei 225 are still up 3.25%, 8.38%, and 11.38% respectively since the beginning of the year despite this week’s market carnage.

Psst…Yuan a bargain?

China’s recent decision to devalue the Yuan will have the expected negative effect on luxury goods purveyors, commodity producers, as well as any non-Chinese company that exports its products into China.

Instead of panicking – as most investors are likely to do – and selling your shares in these businesses, now may be the time for long-term investors to step back, assess the situation, and possibly take advantage of any fall in share prices.

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