A Look at the Week’s Global Economic Events

We take a look at global economic updates or interesting key developments that investors can take note of. First up, we take a look at the resurgence of huge investor interest in Greece’s bonds as a sign of returning confidence in its economy. Next, we’ll be looking at the recent tech stocks sell off in the United States after hitting all-time highs.

Overwhelming demand for Greece’s 5-year bonds

After causing ripples across Europe with the biggest ever historical default in the past four years, Greece’s economy has welcomed an oversubscription – of some eight times – for its five-year bonds worth a total of US$4 billion. This is being marked as a big milestone for the country along with being a sign of recovery for the Greek economy.

According to Prime Minister Antonis Samaras, “The reception of the five-year bond has exceeded all expectations; International markets have expressed, beyond any possible doubt, their confidence in the Greek economy.”

Moreover, although Greece announced a 5% and 5.25% return on the bonds to raise €2.5 billion, offers of about €20 billion came in which allowed the lowering of the yield to 4.95%, a level much lower than what analysts expected. It is also noteworthy that nearly 90% of the bonds were sold to international investors, further signifying the restoration of confidence in Greece’s economy by the international community.

Roller Coaster ride for U.S. social media shares

Along with the United States Federal Reserve’s tapering of its bond-buying programme, the US stock market has started to soften out with social media stocks ‘leading the charge’.

Last week saw a sharp fall in the technology stocks market index, the Nasdaq; it fell by 3.1% on Thursday, the highest daily decline since 2011. Further analysis would have revealed that the most popular social media shares were hit the hardest with Facebook experiencing a 17% fall. Meanwhile, Twitter had lost almost a quarter of its value in the same period.

Previously, Facebook, LinkedIn and Twitter were some of the most popular U.S. counters as their stock prices seemed to be breaking new ground every now and then in lieu of their superb growth potential. Today however, their record high stock prices have come under heavy fire with short-selling continuing to be a concern.

As the saying goes, “When the U.S. sneezes, Asia will catch a cold”. Thus, in Singapore, it’s no real surprise to see the Straits Times Index (SGX: ^STI) falling slightly over the past week by 0.5% based on its close last Friday.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo does not own shares in any companies as mentioned.