1 / 12

What Affects the Stock Market?

Explore the various factors that can affect stock prices on the market, including inflation, deflation, company layoffs, store closings, firing of CEOs or company officials, market scandals, world events, psychology, and other influences.

bakerb
Download Presentation

What Affects the Stock Market?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. What Affects the Stock Market? Instructions: Use this PowerPoint to fill in the bubble map. List the things that affect the prices of stock on the stock market.

  2. What Affects the Stock Market • Bubble Map

  3. Inflation • Inflation is the rate at which the price of goods and services increases. • It is the result of several factors, including a rise in the cost of manufacturing, transporting and selling goods. • When inflation is at a low rate, the stock market responds with a swell in selling.

  4. Deflation • Deflation is when the cost of goods drops. • While deflation sounds like it should be a good thing, it’s not. • Deflation actually causes a drop in the stock market because investors see it as the result of a weak economy.

  5. Company Layoffs • Layoffs • This is usually good for the company and its stock price because expenses will be reduced significantly and quickly • This should help increase earnings right away • It is not always a major warning sign; it could just be a reaction to a slower economy • It is one of the quickest ways a company can cut expenses if sales have not been meeting expectations • Examples: American Express, Wal-mart

  6. Store Closing • Store Closings • This event often causes the stock price to go up for the same reasons as layoffs • However, this is not always the case. • Closing stores actually requires a lot of money, and the positive effects of it do not take place immediately. • This could be a sign that the company is truly in trouble at the moment

  7. Firing of CEO or Company Officials • Firing of CEO or Company Officials • This may sound very negative at first, but it does show that the company’s board of directors was bold enough to take drastic actions to help the company in the long run • The stock price could go up or down after this announcement, depending on the situation. • In some cases this event could be a sign of corruption that reaches beyond these individuals and there could be more negative announcements to come.

  8. Market Scandals • Market Scandals • Traders tend to frown upon corruption in the stock market. • Mutual fund scandals that have occurred in the past few years and corporate corruption such as Enron. • If people cannot trust the stock market, why would they invest their hard-earned money in it?

  9. World Events • World events impact stock prices. • Natural Disasters • Civil Unrest or conflict abroad • War • Terrorism • Uncertain times often motivate people to pull out of the stock market and invest in lower-interest but more stable investment options.

  10. Psychology • Fear and greed are the two of the strongest human emotions that affect the market. • Emotions often impact the stock market. • When stock prices drop, many investors trade their stock out of fear that the prices will drop further. • Others may hold on to stock longer than ideal when prices go up as they hope to strike it rich. • These actions caused by emotions impact stock prices.

  11. Other • Oil and Energy prices • Media • Rumors • Cause panic • VERY powerful • Can say what they want • Both GOOD and Bad • Ex: News makes announcement about a new piece of technology

  12. What Affects the Stock Market?

More Related