The World Around Us

Traders, the last couple weeks have been extremely tough to traverse. Here are some tips to understand what's going on in the world around you.

Europe is continuously having trouble in packaging a bailout fund for countries. Recently, S&P put multiple countries on Credit Watch Negative, meaning that it may downgrade their sovereign debt ratings soon. This would be horrible for the markets, and while many of you may think a simple solution exists, it really doesn't.

Europe has to change many underlying problems, and that will take time that many economists and analysts believe we do not have. To recruit some help, Europe has been reaching out to outsiders, including China. China has political and economic reason to help out Europe, but negotiations are still underway.

Another thing you should know about is Middle Eastern tensions. Iran has closed the Strait of Hormuz in order to conduct military tests. This strait is the single largest exporting point in the Persian Gulf, so commodity prices could further fluctuate if activities there are ramped up. Commodities will also generally be affected if tensions further rise in the Middle East.

Traders, knowing the news a minute late could mean the difference between profit and loss. Volatile markets fortune the quick, and it always helps to know what's going on in the rest of the world to figure out how to place trades. Keep an eye out for news outside the US to determine how US markets move.