The global stock market has been all about ups and downs lately! There’s no second thought to the fact that the stock market is volatile. Adding to it, there are multiple reasons behind why particular stocks fall and rise regularly in the stock market live news.
While it seems that the movements are predictable, it isn’t what it seems. Multiple factors and events affect the movement behind particular stocks in the market. Interestingly, some of these factors also influence the everyday prices of the stock directly.
Known as ‘trends’, these movements allow investors and traders to capture the profits. Whether on a long or short time frame, the flow of different prices revolves around a few factors.
Therefore, before you get confused with how the market is and move, let’s look into the different factors that affect the flow of the global market. Elliott wave theory is a technical analysis is based on the premise that, over time, certain market conditions are repeated. These patterns show up in stock market action and can be used to predict future changes in investor sentiment and psychology.
Primary Factors Influencing The Stock Market
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Internal developments with companies
Mergers, earned reports, acquisitions, dividend suspensions, the creation or approval of a new inventive product, the hiring or firing of business leaders, and charges of fraud or negligence are all events that can impact the price of a company’s shares. Stock price swings will be the most dramatic when these internal changes are unanticipated, the results of which will be visible in the stock market channels.
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Impact of real-world events
World events such as war and civil unrest, natural catastrophes, and terrorism can impact company stock prices and the stock market in general. These effects might be direct or indirect, and they frequently occur in series. The terrorist attacks on September 11, 2001, created societal uncertainty and dread, which impacted markets immediately by causing many investors in the United States to trade less and focus on lower-risk equities and bonds.
For instance: The launch of a new military initiative by a country in reaction to the emergence of civil disturbance or violence elsewhere is an example of an indirect impact on markets. Due to a projected increase in defense contracts, this news is likely to cause the price of military equipment and weapons makers’ stocks to rise, improving the value of stocks for firms that sell military equipment components and technologies.
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Inflation and interest rates
Periodic interest rate increases by the US Federal Reserve to combat inflation are more predictable impacts on the stock market. When interest rates are raised, many investors sell or exchange their higher-risk equities for government-backed securities such as bonds to take advantage of the higher interest rates and protect their investments.
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Impact of exchange rates
Changes in exchange rates will raise or decrease the cost of doing business in a nation, affecting the price of stocks of businesses doing business overseas. While basic market variables such as supply and demand and purchase price parity influence long-term exchange rate fluctuations, short-term swings are influenced by futures trading, news, events and are difficult to forecast.
Now You Know!
When it comes to stock market live news, it needs to be noted that there are multiple factors which come into play. Even if you think you might have mastered it, the truth can be compelling.
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