Money Minute: Investors Eye World Events for Next Move

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Will geopolitical tensions in Ukraine and the Middle East be what triggers a correction or will investors shrug it off in a few days?

Financial markets were hit by a double whammy of troubling developments on Thursday: Malaysian Airlines' downed plane and Israel's ground offensive in Gaza. The Dow dropped by triple digits and the VIX, known as the "fear gauge" rose by more than 32 percent -- it's biggest one-day jump since April 2013. This is leading some to question whether this could be what triggers a correction.

Disney CEO Bob Iger Rings Closing Bell At New York Stock Exchange
Spencer Platt/Getty Images
Experts say it depends on what caused the plane crash. The worst-case scenario is that Russia is behind it. That could raise already heated tensions between Russia and the United States and Europe, which could have an impact on many businesses. But history tells us the market tends to get over political unrest pretty quickly. When the Ukraine crisis first emerged oil prices spiked but then leveled out. The same thing happened when Sunni insurgents attacked oil fields in Northern Iraq. It seems that this market wants to keep marching higher so it might be back to focusing on earnings and economic data before you know it.

Just how bad was the damage Thursday on Wall Street? Well, the Dow Jones industrial average (^DJI) fell 161 points, the Nasdaq composite (^IXIC) dropped 62 and the Standard & Poor's 500 index (^GPSC) was down 23 points.

If you find car dealerships intimidating because of the hard sell but you want to buy a car, you're in luck. AutoNation (AN), the U.S.'s largest car dealership chain, is going to make it possible for you to make a purchase with just a few clicks from the comfort of your couch without ever having to interact with anyone. The company is investing $100 million over the next two years to develop a new app that will also eventually allow you to get an appraisal on trade-ins. The app is expected to go live later this year. I wonder what this means for their salespeople.

And finally, a new report by the Pew Center finds that more people are living in multigenerational households than ever before and the number of millennials living in their parents or grandparents' homes has skyrocketed. More than 18 percent of the U.S. population now lives with family members of a different generation and more than 23 percent of people aged 25 to 34 live with their parents and/or grandparents. That is a roughly 23 percent jump from 2007 before the financial crisis. The main driver for the phenomenon: economics. The sluggish job market is forcing many young people to delay flying the coup or causing many to return to the nest.

-Produced by Karina Huber.


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16 Comments

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socioeconomist1

I have been preaching stay living at home for free for years... I hope Millennials are living at home by choice and being smart with their money instead of being stupid and living in debt like the Boomers did. It also helps preserve nature by not tearing down forests to build a lame ass poorly constructed McMansion in the suburbs.

July 18 2014 at 4:52 PM Report abuse -1 rate up rate down Reply
socioeconomist1

Ok here is the skinny.... The stock markets are all manipulated by the banks and other institutional investors. Every major stock is majority owned by institutions. The stage we are in now is basically cruise control. The stock markets will fluctuate around (DOW) around 17,000 to 19,000 over the next 4 years till the next recession hits again. The media, who is nothing more than gossip hounds, will be told by the banks this and that when they raise and lower the values to make the markets look active. Then the media will just tell everyone what the banks said and want us all to hear. Europe is still in the taint, and that is like 25 Ukraines and Gaza strip conflicts in one, yet our markets have gained 5000 (DOW) points over the last few years. So, it is all crap. The stock markets will run strong for at least 3 and half more years... Then depending on what the next president does to soften the blow will be when the next recession happens. The tech bubble actually popped in 1998, but Clinton did everything he could to delay the recession till Bush became President in 2000... HW Bush had the same thing happen in 1987, but was unable to do anything about it since HW was a intelligence minded president and not an economic minded president like Clinton was. Well, according to Greenspan, Clinton was actually a stooge that let Greenspan do whatever he wanted and Greenspan managed the tech bubble pop for Clinton.

Long story short... This is all manipulated. Stocks will sell off in the future bobbsafe, just like they always do. There will be another recession. But, it isn't going to happen till some time between 2018 and 2021.

July 18 2014 at 4:32 PM Report abuse -2 rate up rate down Reply
1 reply to socioeconomist1's comment
socioeconomist1

It blows my mind, that in this day and age with all of the information out there... The government and the banks still use idiotic excuses like Ukraine conflict to feed common people a load of crap for why the markets did what they did... Food costs have jumped up 40% because the Chinese are buying up our commercial farms and sending the food to China... But, the media is saying crap like it is chicken roosters that aren't fertile, or a hog virus, or a drought in northern California that causes the entire nation's beef prices to rise. 85% of the nation's beef comes from Texas, Oklahoma, Missouri, and old Mexico while less than 1% comes from northern California.. So a drought that reduces herds (not eliminates them) is not enough of a reason to cause a 40% jump in beef prices. Same goes for hogs and a hog virus. Hogs are not out at the mall discussing feed prices with other hogs everyday to be catching a virus. They are locked away on farms till they get sold for butcher. Either way, for all 3 of the major meats in our grocery stores to all experience a 40% increase is more than a coincidence. The Chinese are buying up American farms and companies like Smithfield foods and shipping the food back to China, and the loss in supply is causing prices to soar in the US. The Chinese did the same thing with mining commodities like iron ore and coal in the 2000's... Instead of buying iron ore from Brazil and hauling it to China, the Chinese went to Australia and other neighbors and invested in iron ore start ups like Fortescue Metals and Rio Tinto... So, not only does the Chiense save on shipping costs, but they own 40% of the company they are buying iron ore and coal from. Which is basically a 40% discount. Instead of buying American agricultural products, the Chinese have simply bought American farms and will get free food out of our nation for all of time. The Chinese are not purchasing the food from the American corporation, so there are no corporate income taxes due. So no profits for an American farmer, and no taxes for the American or state government. this is how china operates..... They don't buy the apple, they buy the farm where the apple tree is planted.

July 18 2014 at 4:44 PM Report abuse -2 rate up rate down Reply
1 reply to socioeconomist1's comment
socioeconomist1

oh and in most states agricultural zoned land is taxed around $5 to $7 an acre.... So, the Chinese come in and buy farm land fro around $2500 an acre, pay $5 an acre in taxes... and export our nation's agricultural products to China free of charge. In the near future, Americans are going to pay through the nose for food while watching it be shipped off to China by the millions of tons..

July 18 2014 at 4:50 PM Report abuse -1 rate up rate down
bobbsafe

I doubt the "market" will ever have a down period again! With all the cooked reports it seems no matter what the situation - jobs, inflation, housing, debt, crisis - the market always and only goes up, up and away so mommy gets a new pair of shoes. I miss the days of accountability (before extreme) when there had to be reasons behind market moves. It seems like "some other" force is controlling the market besides privatre investors these days.

July 18 2014 at 3:54 PM Report abuse +3 rate up rate down Reply
1 reply to bobbsafe's comment
Iselin007

The markets are mostly tied to none domestic anchors in the US. For the last 3 decades companies have been pulling up stakes and doing their business elsewhere much like a dog finds a Hydrant more exciting then the one in it's own neighborhood.

July 18 2014 at 5:36 PM Report abuse +2 rate up rate down Reply
petpetdon

You call them millennials. I call them the Clueless Generation. Those are the people that voted for Obama twice and the country is suffering from it.

July 18 2014 at 3:03 PM Report abuse +2 rate up rate down Reply
2 replies to petpetdon's comment
yurday6

Clueless that's a good description they are good for nothing.

July 18 2014 at 3:33 PM Report abuse rate up rate down Reply
socioeconomist1

most of the people who voted for Obama were white boomers still trying to do what John Lennon told them to do on behalf of Yoko Ono.

July 18 2014 at 4:33 PM Report abuse -2 rate up rate down Reply
Iselin007

NJ's not in the labor force as of the June 2014 BLS report is now 2,563,000 people age 16 and over. Employed 4,198,400 a mere shadow of the 4,286,900 that NJ had on Feb 2008 when there were far less people!

July 18 2014 at 2:16 PM Report abuse -1 rate up rate down Reply
YourFtr

The Liberal Democrat Ideological Obama economy apparently isn't as doing as Peachy Keen as the Media would lead you to believe.........
With the Milennials and grandpa and grandma as well as mom and pop and aunt Jane and Uncle Buck all having to live in the same house......
Evidently there aren't as many good jobs out there for everybody to 'Make their own way' and have their own apartment or House....!!??

July 18 2014 at 1:51 PM Report abuse +1 rate up rate down Reply
Gumby

Maybe Putin was so angry and slammed on the table that threw the switch on and launched the missile ?

July 18 2014 at 12:00 PM Report abuse rate up rate down Reply
1 reply to Gumby's comment
rrob.smythe

Maybe he thought it was Air Force One.

July 18 2014 at 12:03 PM Report abuse rate up rate down Reply
Iselin007

Right now I betting none of your Great .........Grand Father's nor their siblings knew the First President of the United States George Washington but mine did?

July 18 2014 at 11:59 AM Report abuse -4 rate up rate down Reply
rrob.smythe

Step right up and place your bets.

July 18 2014 at 10:58 AM Report abuse +2 rate up rate down Reply
jdykbpl45

Obama's economy is doing soo well.

July 18 2014 at 10:51 AM Report abuse +1 rate up rate down Reply