January 4th, 2016 09:37 AM
The DOW Jones Industrial Average opened today down over 450 points due to a 7% drop in China stocks and a halt in trading caused a worldwide selloff.
Last year China imposed new trading laws that limited when shareholders could sell their stock. The circuit breaker system kicks in when the market drops more than 5% in order to calm massive sell off. Bloomberg reported that it was the worst year opening for China ever as stocks dropped and circuit breakers kicked in.
There are some major current events fueling the massive selloff with Saudi Arabia and Iran at the top of the list and a potential war looming in the shadows. Protests are erupting everywhere due to Saudi Arabia’s mass execution which included a prominent Shiite Cleric. The Saudi Embassy in Iran was raised and burned. Iran and Saudi Arabia are not the friendliest neighbors and this situation could cause an explosion in violence and a full blown war in the region. Oil supply, demand, and price is about to get a little more complicated once sanctions start flying and God help us all, a war.
China manufacturing numbers are down which is the manufacturing hub of the world. On top of that, US manufacturing is down.
This is not the start to 2016 Americans are looking for.