3 major US banks have set aside an additional US$23 billion as a buffer against bad loans, highlighting the brittle state of the US economy due to the COVID-19. How does a bad US economy affect us? - Seedly
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Anonymous

Asked on 15 Jul 2020

3 major US banks have set aside an additional US$23 billion as a buffer against bad loans, highlighting the brittle state of the US economy due to the COVID-19. How does a bad US economy affect us?

Should we be concerned?

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Maisul
Maisul, Youtuber at Google (Channel : Say Do Invest)
Level 5. Genius
Answered on 15 Jul 2020

I totally agree with you on the state of the US economy.

Just look at the DJI (dow jones industrial) index of the US economy in march and the STI (singapore index)

There was a massive sell off in the market due to fear for the virus.

This massive sell off in the US also stimulates sell of in other stock markets all over the world.

It shows that majority of investors are trading in the US markets as that is where most giant companies prefer to list their stock in.

Investors like me, invest in the US market and SG market.

So imagine me as an investor, fearing about my US stocks, it would also lead to fear of holding my SG stocks. Hence selling off all of my positions.

I hope the above explains the theory, it might not be true but at least is makes sense for me.

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