"SHARE prices have been falling persistently since the start of 2016 with markets in Europe and Japan falling more than 20% from their recent highs, the technical definition of a bear market." A bear market can be defined as a market that has gone down by at least 20%, there is lack of confidence in the market as well as prices usually have a downward trend. There is no definitive reason for a decline in stock prices. One common belief is that an increase in interest rates due to a discretionary monetary policy in China by the government may be a major factor. The confidence in the economy is also decreasing and i said to be lower than before. This directly effects the stock markets as a loss in confidence in the economy results in less investments by investors as they believe that the stock prices will keep going down as the trend suggests. On the contrary it is also possible that the decline in share values may be a result of share princes being inflated or over valued before.
http://www.economist.com/blogs/economist-explains/2016/01/economist-explains-14
Really liked this article. It interests me greatly because I actually recently invested in the the stock market because some of the stocks were a lot lower than their share price 6 months ago. It's interesting how international markets can affect our market so crucially.
ReplyDeleteReally liked this article. It interests me greatly because I actually recently invested in the the stock market because some of the stocks were a lot lower than their share price 6 months ago. It's interesting how international markets can affect our market so crucially.
ReplyDeleteIt is hard to accurately define the reason for a fall in the stock market but this article has a fairly interesting take on it. I also like AJ's take on international markets and how they play a role in our markets. Specifically markets like China, who seem to be on a decline. Russia's economy has also taken a hit and work in Russia now seems to be cheaper than work in China, according to foreign buyers.
ReplyDeleteThis is similar to the article I found. It focused on consumer confidence and how large of an impact it has on the economy. In another blog post it mentioned that they are planning to increase interest rates in the United States. I don't think there is one particular reason why stockmarkets are following, but several different ones combined.
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