Investors will want to forget this past week as soon as possible. Equities kept losing all around the world. The tough situation of the US economy is making investors to take their money out of stocks and put them in safer assets like bonds or gold. The Dow Jones Industrial Average declined 2.00% to 13,255. The more representative US index, the S&P500, lost 1.85% to 1,473.1. Better-than-expected readings of macroeconomic publications did not help the equities markets. The ISM-Nonmanufacturing index was at 55.8 while analysts expected only 54.0. US Trade Balance declined to -56.5B against the forecasted -59.0B. The situation of the US is so difficult that the European Central Bank left interest rates at 4.00% while the Bank of England at 5.75%. Both central banks see the need to raise interest rates due to increasing inflationary pressures in the Euro zone and England but are holding their decision to avoid a global financial crisis.

Asian equities were hit hard by the US declines. Asian countries, being the biggest US exporters, are strongly affected by what is going on in America. The Japanese Nikkei 225 lost 3.68% to 15,650. Not only Asian markets were hit last week. Emerging countries’ markets also felt the declines of US indices. The Polish WIG20 tumbled 5.40% throughout the week all the way to 3,586. Investors are wondering if the big declines from August are back. All this happens when inflationary pressures in Poland increase. The Polish Monetary Policy Council is expected to raise interest rates in Poland by 25 basis points on their November meeting. That can push the WIG20 even lower.

Adam Narczewski