Dubai Credit Rattles the Stock Markets

The world stock markets fell on Thursday as Dubai attempted to delay debt payments for six months.   The US stock market was closed for the Thanksgiving holiday, but the S&P futures are down considerably.  Commodities, especially oil prices, are weakening while the U.S. Dollar and Treasury bonds are starting to rise.

Emerging markets are suffering significant losses and money appears to be moving into consumer staples.  Investors remain very cautious as we wait to learn more about Dubai’s credit situation.   Keep in mind that money managers are eager to lock in profits for the 2009, so an event such as this may be a catalyst for year end selling.  Couple this with the fact that the US dollar and Treasuries are at historic lows, and we may see some selling pressure ahead.