It’s no secret that most European economies have been struggling. In 2012 and 2013, Spain’s economy shrank by 1.6% and 1.3%, respectively. Italy’s shrank by 2.4% and 1.8%, respectively. The “big three” of Germany, France and the United Kingdom were able to eke out growth … barely. But things may be looking up for European […]
How Economic News Moves the Market
With the growing popularity of mobile devices economic news is literally everywhere around us, and it affects all aspects of the financial markets.
That’s why there are news outlets like The Wall Street Journal, Bloomberg, Barron’s, Yahoo! Finance and countless others that are dedicated to reporting economic news. Today’s merger, earnings report or bank default can have a major impact on your stocks. Economic news can change how a sector of the market – or even a particular stock – is perceived.
When the news is good, it can embolden investors to ride the economic uptick – however brief – and buy more stocks, thus driving stock prices up. A headline that reads, “Unemployment Numbers Down Last Month” or “Apple Reports Record iPhone Sales” can convince traders that the economic outlook is improving.
When the news is bad, it can result in fear, convincing investors that the sky is falling. Reports that a Greek default is imminent or that Lehman Brothers has filed for bankruptcy causes traders to sell, sell, sell as they prepare for the worst.
These days, with the 24/7 news cycle upon us, economic news has more influence than ever before. Because people can now access the latest news via their computers or smartphones rather than waiting for tomorrow’s newspaper, economic news gets reported throughout the course of a day. That can send the financial markets fluctuating. A bear market by morning can turn bullish by the closing bell on Wall Street if a positive bit of economic news comes to light during the trading day.
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