Global stock market disasters spread again? Turkish Storm Key 3 Q | TechNews Technology News

"Flies are not a seamless egg", this is the image of Turkey. The revival of the country's currencies has led to a sharp decline in European and Asian stock markets, which is due to Turkey's violation of the market rules. Although the market will fluctuate violently in the future, it will still be rewarded if it says "buy in the fall".

Sickness roots: high external debt, high inflation

US President Trump 8 10 announced that the Turkish steel and aluminum products will be subject to tariffs, the country Lira against the US dollar On the same day, the answer was close to 14% and the German stock market also fell close to 2% . On the other trading day, shares in Taiwan fell more than 230 and the Japanese, Hong Kong and Chinese shares also fell. The total Asian market value evaporated NT $ 9 trillion yuan.

The Turkish crisis has raised three questions: first, where did the crisis come from? In fact, the Turkish economy is not bad: more than 8 10 million people are in third place in Europe, cheap labor is the advantage. Nowadays cheap Turkish household appliances account for about 20% in Europe, and clothing that is exported to the EU can compete with China. The services sector can also view: the number of tourists to Turkey last year 3, 200 million, higher than Switzerland 70% the total market value of listed companies on the Istanbul Stock Exchange goes about NT 5 Mega 4 100 billion yuan, more than the United Arab League and Dubai.

Therefore, the Turkish issue is not fundamental, and the real cause is that the authorities are breaking the laws of the market. The economy of the country has a "double high": high external debt – the total external debt equals more than half of the gross domestic product ( GDP ), inflation is high – this year 7 monthly inflation 16% a 14 new year.

This stems from government intervention. The government of the local government has spent a lot of money. In the first quarter of this year the budget deficit rose by almost 16% and it was sufficient to borrow. In order to reduce the interest burden, the president of the country, Erdogan ( Recep Tayyip Erdogan ) wished to freeze the rate hike, so that the company borrowed heavily and the current accumulated debt was higher than NT $ 194590136 trillion 6 100 billion yuan, higher than the Portuguese national GDP . The lira also fell through the monetary easing policy. Before the American sanctions, the Turkish lira was one of the worst performing currencies in the world: in the past 12 the depreciation of the US dollar exceeded 36% .

On the diplomatic route, Turkey and the West have separated in recent years The New York Times said: "The conspiracy theory that" the West intends to undermine Turkey "is deeply rooted in the Turks." American and German citizens have been broadcast in the country. On the one hand, Western companies avoid the country, such as 2015 the Citigroup of the United States sells its shares in the country's fourth largest asset bank. On the other hand, American companies have reduced their direct investment in the country, according to the latest statistics ( 2016 ) American direct investment in Turkey 3 billion 2 million American dollars, reduced by 5 years ago 70% .

In addition, the president of the central bank of the country was appointed by the president and monetary policy was repeatedly criticized for lack of independence. The president also did not evade pro-independence and his son-in-law served as minister of finance. The original market expects this Ma Maye to promote economic reform and has only heard the stairs so far. If you violate the laws of the market, you will be punished. Even if there are no US sanctions, the problems of the soil countries will sooner or later be caused by other factors.

The second question is: will the Turkish crisis spread? One of the main sources of external debt in Europe is Europe, where the two banks of Spain and Italy are the largest creditors. The two banks have a total of almost 900 billion euros of Turkish risk-bearing assets. If Rila continues to repay pressure on the land, these banks are afraid of being pulled down, which is the reason for the recent panic in the market.

But in general, the Turkish crisis has limited consequences for other countries. The country GDP is less than 60% of Russia and a quarter of Germany. Even if the export of the country decreases by 20% but economic growth in the eurozone fell 0.1 percentage points. At the same time, the Alum Emerging Markets Index of Turkey ( MSCI Emerging Markets Index ) was responsible for a relatively small share, so the possibility of a complete collapse in emerging markets is not high.

Investment in the shock era: buy on the fall

The final question is: what impact does the Turkish crisis have on the future stock market? The global stock market is dominated by US stocks and the data show that the fundamentals are still good. In the second quarter of this year, US economic growth was 4.1% the highest level since 2014 . The last quarterly report of the S & P 500 index, almost 80% profit is higher than the market expectations, is the best performance of 10 .

US stocks rose sharply last year 19% this year it only increased around 6% Nobel Prize for the economy, Le "Schiller & # 39; s P / E ratio" from chairman Le (] Shiller PE ratio ) shows that the US stock-in-earnings ratio is higher than the eve of the economic depression in 1929 plus this year 2 months after the US stocks fluctuated strongly, many people fear that corporate earnings are reflected in high share prices. Under this type of psychology, the current territorial crisis, the other countries of the future from the package, a storm has led to a sharp fall, market volatility will be fiercer than before and now emerging markets have reached a new low for more than a year.

But the crisis also brings opportunities. In fact, in recent years 10 as investors pursue "buy on the fall", there is almost no victory. As far as Taiwan is concerned, 2008 10 are the shares of Taiwan for two months 26% less than half a year to recover lost ground declined. 2015 Year 4 From the beginning of the month the shares of Taiwan 4 almost decreased 20% and returned to the peak in less than two years.

Although several future crises will lead to equity market volatility, these random factors will become overwhelmed in long history. Sticking to "patience" and "courage" is perhaps the best strategy for investors in the future. [19659004] (Author: Yangshao Jiang; This article is taken from the "Business Week" license; first photo shows the president appeals to the Turkish entrepreneurs to support the lira in gold or foreign currency, Source: image Dazhi) [19659012] Continue reading: [19659019] // google plusone
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