Retaliatory efforts by Russia’s President Putin in response to sanctions imposed by the U.S. and the European Union have created hurdles for many multi-national companies.
A concern has emerged from these sanctions of the possibility that dealing in U.S. dollars may impede trade relations between countries that want nothing to do with penalizing Russia. Because of rules set by the U.S., certain international companies and banks are starting to become restricted as to who they do business with.
Putin’s response to the sanctions now include the banning of agricultural imports from the U.S. and Europe, including chicken, fruit, vegetables, butter, milk, and cheese.
Unlike their international counterparts, U.S. equity markets have been somewhat immune from global issues, as the Dow Jones Average maintained its lofty levels and the S&P 500 climbed to all time highs in late August. The United States has been a pillar of economic stability in the midst of global uncertainty, with the dollar and consumer confidence strengthening over the past few months.
Economic data released in August bolstered the case for stocks tied to the U.S. economy, as industrial production rose more than expected and the number of job openings was at the highest level since 2001.U.S. companies doing business domestically have become a beacon for global assets due to limited international exposure.
Gross domestic product (GDP), the value of all goods and services produced, rose at a 4.2 percent annualized rate, up from an initial estimate of 4 percent, the Commerce Department reported. Better than expected housing data also helped elevate stocks as an improving housing market reflects a healthier economy.
More stringent regulations surrounding the disclosure of overseas assets that became effective on July 1st under the Foreign Account Tax Compliance Act (FATCA) prompted 576 Americans of the estimated 6 million living overseas to renounce their U.S. citizenship and passports.
Central bankers met in Jackson Hole, Wyoming, for the annual Economic Symposium Conference sponsored by the Federal Reserve Bank of Kansas City. The conference includes prominent central bankers, finance ministers, academics, and financial market participants from around the world. This year’s conference focused on subdued international growth and how best to stimulate both the labor and financial markets.
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