US Stocks Fall on Concern of Rising Rates, Inflation

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February 15, 2018

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Exercise 1

Vocabulary

inflation

Noun

ɪnˈfleɪʃən

a rise in prices which makes money less valuable

Due to inflation, my money is worth less this year.

The prices of goods and services rise during periods of inflation.

Inflation can be a sign of currency in high demand.

fret

Verb

fret

to be very worried or unhappy

She spent the day fretting about what she'd say to her boss.

wear on

Phrasal Verb

wer ɔːn

to pass in a slow way

As the day wore on, it became clear that he wasn't going to show up.

bond

Noun

bɑːnd

an agreement by a government or organization to pay a fixed amount of interest on a loan

He advised them to invest in bonds as well as stocks.

I work as a bond dealer.

The central bank will purchase foreign bonds to lower the value of the country's currency.

In the country, all companies issuing corporate bonds are required to obtain the government's approval.

yield

Noun

jiːld

the amount produced by something

This investment has only produced a very small yield.

I am always looking for investment opportunities that might produce a high yield.

Exercise 2

Article

AI Generated Audio––:–– / ––:––

US Stocks Fall on Concern of Rising Rates, Inflation

U.S. stocks have tumbled again as investors continued to fret about the possibility of rising inflation and higher interest rates.

For the second time in four days, the Dow Jones industrial average sank more than 1,000 points, or 4.2 percent, to end Thursday day at 23,860.

As the day wore on, it became evident major U.S. stock indexes were headed toward their fifth loss in the last six days, erasing big gains in the first weeks of the new year.

Stocks began to tumble last Friday after the U.S. Labor Department reported wages grew rapidly in January, sparking concern of higher inflation and lower corporate profits.

Earlier in Europe, stock prices declined and bond yields increased after the Bank of England said it may boost interest rates in response to a strong global economy. Britain's FTSE-100 Index fell 1.5 percent and Germany's DAX plunged 2.6 percent.

The picture was brighter in Asia, where Japan's Nikkei 225 Index climbed just over 1 percent, South Korea's Kospi Index rose five-tenths of one percent, and Hong Kong's Hang Seng Index gained four-tenths of one percent.

Exercise 3

Questions

Why did U.S. stocks fall once again?

When did the fall in U.S. stock prices begin?

What happened to major stock indexes in Asia?

Exercise 4

Discussion

What are your thoughts on the recent fall in U.S. stock prices?

Do you believe that another global financial crisis is likely to occur within the next decade? Why do you think so?

Why do you think fluctuations in U.S. stock prices have such a major impact on other trading centers?

How would you explain the fact that the Asian stock market saw gains despite the situations in the U.S. and Europe?

How stable would you say your country's economy is at the moment? Why?

Exercise 5

Further Discussion

Do you follow the stock market? Why? Why not?

Have you ever considered investing in stocks? Why? Why not?

If you were to buy stocks, what company would you invest in and why?

If you were in charge of your country, what would you do to stimulate economic growth?

What country do you think will have the world's largest economy in 50 years? Please justify your answer.

Exercise 6

Quotes

I will tell you how to become rich. Be fearful when others are greedy. Be greedy when others are fearful. - Warren Buffet. What is your take on this advice?

The stock market is filled with individuals who know the price of everything, but the value of nothing. - Phillip Fisher. How would you interpret this statement?

Exercises for Further Self-Study

These self-study exercises are optional and should be carried out after the lesson has finished.

Exercise 7

Sentence Building

Write at least one sentence for each of the words in Exercise 1: Vocabulary. Begin by making sure you understand the definition of each word. Use the example sentences as a guide if you are unable to think of a sentence. Practice reading your sentences out loud.

Exercise 8

Summary

Make a brief summary of the article. Focus on the main topic and consider which pieces of information are most important. Make sure you include details such as what the article is about, who is mentioned in it, where and when the events took place, and also how and why they happened.

Parts of this lesson are based on:

An article by Voice of America.

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