Global Markets Are Getting Rocked

Even after Thursday's 175 point (1%) plunge in the Dow Jones Industrial Average, markets continue to tumble. Currently Dow futures are down 88 points and S&P 500 futures are down 11 points.

Investors and traders are rapidly moving from risky assets like stocks and emerging market securities to safe assets like U.S. Treasury securities. Indeed, the flood into Treasuries has sent the yield on the 10-year note all the way down to 2.72%. Not long ago, it was above 3%.

Asia got slammed with the Nikkei tanking 1.9% and Hong Kong's Hang Seng falling 1.2%.

Europe is deep in the red with Britain's FTSE 100 down 0.9%, Germany's DAX down 1.2%, France's CAC 40 down 1.4%, and Spain's IBEX down 2.7%.

Emerging Markets

The top concern today seems to be the emerging market economies, where it is a total rout in the currency markets. The Turkish lira has tumbled to a record low and South Africa's rand is at a 5-1/2 year low.

Meanwhile, it's continued madness in Argentina where policymakers unexpectedly announced an easing of capital controls a day after the Argentine pesos plummeted 13%.

Why are the emerging markets getting slammed?

Simply put, many of these fast-growing economies continue to be heavily dependent on their ability to export goods. However, they have also been confronted by devaluing currencies and rampant inflation.

And with the U.S. Federal Reserve expected to soon normalize monetary policy, there is concern that rising interest rates and a strengthening dollar against emerging market currencies will send the emerging markets toward a financial crisis.