DUBAI, DUBAI, DO!
The Friday after Thanksgiving is usually a bland trading day in the markets. This time, the announcement of a suspension of payments by Dubai to its biggest commercial borrower sent out panic waves that ruffled traders all over the world.
We’ve been here before, in the Never Never Land where rumor is king and selling is queen. Like a forest fire, the rumor will be contained. There will be some actual damage, probably mostly to lenders in the UK, who seem to have about 72% of the debt impacted. In all probability, things will get worked out although the extent to which the debt may have to be restructured is unknown.
How will this affect our stocks? Probably not at all, although there may be a few days of nervous selling. I’ll be checking overseas markets that open before New York this Monday with the intention of doing some buying soon after the first signs of firmness.
Probable targets will be some of my favorite dividend-paying blue chips like United Technologies, Lilly, Teva, Life Technologies, Intel, FedEx and 3M.
Shoot me an email if you have questions, meanwhile, enjoy the weekend.
Tony Crowell