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Factors that affect the stock market
There are many factors that affect the stock market, however below is a list of the main factors.
- Inflation rates
- Interest rates
- Employment rates
- The property market
- Oil prices
- War
- Natural disasters
- Big company mergers
- Big company buy outs
- Good/bad company news
All these factors will be listed and their daily impact on the stock market explained if you subscribe to a newsletter or a news site like ADVFN.com .
Find out why stock prices move up and down.
Find out how to profit from a falling stock market – shorting stock.
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Below is just a little information from my small unique book “The small stock trader”:
It is generally believed that about 50 percent of stock price movements are influenced by the market sentiment, about 25 percent by the industry, and only about 25 percent is the result of company-specific news (this percentage is higher with small caps). I am not sure about the exact percentages, but it is definitely true that non-company-specific news has a much more significant impact on stock prices than companyspecific news.One could argue that since about 75 percent of the stock price movement is the result of non-company-specific news, it would be wiser just to focus on the non-company-specific news and ignore the company-specific news. However, it is this company-specific news that you can somehow try to forecast. There may be over 100 different and unpredictable non-companyspecific catalysts that affect stock prices. So, you should focus your research on company-specific news and just scan macro news, especially if you are focusing on a few small caps. Some of the most frequent catalysts that may affect the stock prices of your focus stock are:
• Market sentiment (GDP, inflation, monetary policy, fiscal policy, government regulations, unemployment, consumption, trade balance, other financial and commodity markets, political and international affairs, nuclear and climate change challenges, military wars, currency wars, cyber wars, natural disasters, conflicts in the Middle East, Asia, globalization issues, etc.)
• Industry
• Corporate results
• Profit/loss taking
• Institutional buying/selling
• Analyst ratings
• Dividends
• Insider trading
• Share buybacks
• Promotion
• Shareholder activism
• New management, products, orders, or shareholders
• Reorganizations
• Right issues
• Stock splits
• Inclusion in an index
• Calendar effects
I hope the above little information from my small unique book was a little helpful!
Mika (author of “The small stock trader”)