A sigh of relief, just about

Now that the European Union and Eurozone countries had agreed to a plan to address its current sovereign debt crisis, the world was relieved that the situation may not lead to a contagion credit crisis that could shake the global financial system. The stock markets rallied from Europe to Asia and I can imagine in US as well later tonight.

This rally was, I guess, to play catch-up to move up from an oversold position due to the uncertainty of the crisis in past months. The pertinent question is whether the latest EU plans of actions had altered the economic situations of the world. I think not. Economic growth depends on demands of goods and services of the world economies. Global economic growth has slowed and was projected to be so in 2012. If this is the case, the stock markets will find their levels to be in line with the projected economic growth of respective countries.

Copyright © 2011, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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