Questions tagged [stock-market]

Markets in which ownership stakes of firms (e.g. stocks/shares) can be traded.

Filter by
Sorted by
Tagged with
14
votes
5answers
4k views

When a stock market crashes, how does money just disappear?

I looked it up online (here), but I find it hard to believe that money literally "disappears". For example, if I buy 10 stocks of a toaster company for \$100 per share, and then the stock value drops ...
13
votes
5answers
18k views

Does the Federal Reserve buy and sell stocks?

Can the Fed buy and sell stock in publicly traded companies? Is there evidence of this and, wouldn't this behavior drive the price as opposed to actual market forces?
12
votes
4answers
6k views

Does the US stock market tend to rise after natural disasters?

It seems counter intuitive that markets would rise after a huge disaster that probably affects multiple industries like oil or produce. For example, can someone explain why the US markets actually ...
11
votes
4answers
3k views

Are financial markets "unique" for each "currency pair", or are they simply "translated"?

This is something I've been long wondering about. Let's say that I have statistics showing the daily closing Bitcoin price in USD since early 2009. Great. Now, if I wanted to get the daily closing ...
10
votes
8answers
251 views

Is belief in future dividends the only long term value of stock?

Are future dividends the primary value backing that a stock price will rise? (Let's assume that purchase by a competitor is an unlikely event and discount the value this might have). It seems to me ...
10
votes
5answers
5k views

Can the stock market grow faster than GDP indefinitely?

My understanding of conventional wisdom is that average long-term growth of advanced economies is expected to be significantly lower than the average long-term growth of the value of the largest firms ...
10
votes
1answer
215 views

Do large public companies ever "quit while they're ahead"?

Large public companies (e.g. S&P 500) seem to end their lives in one of two ways: either they're acquired (or taken private), or they go bankrupt. Theoretically it seems like there should be a ...
9
votes
3answers
4k views

Can the stock market show indefinite exponential growth?

In a comments on a question on money.SE, the following dialog took place: Eventually there will not be enough matter to represent all the money, so we know for certain that the answer is "No" for a ...
9
votes
6answers
493 views

Why do falling oil prices take stocks with it?

The price of oil fell again today and is now below $30/barrel for the first time in 12 years. Along with the fall came most of the US stock markets. If I didn't know any other information except for "...
9
votes
1answer
254 views

Why do stock exchanges not operate at a fixed frequency?

Would this not be more fair towards traders who don't trade at high frequency? And would it not be possible to distribute this fixed frequency to other exchanges, modulo relativity? The reason I'm ...
8
votes
4answers
240 views

Does stock picking work?

Does stock picking work? Why/why not? What does the research say about it? (I was expecting that this should already have been asked and looked quite extensively for such a question but couldn't find ...
8
votes
3answers
1k views

What is the mechanism that triggers a stock price change?

When discussing with my son basic economics (how the price is driven by demand, among others), I came to wonder which exact mechanism triggers a price change in a stock exchange. In everyday life, ...
7
votes
6answers
694 views

How can the stock market keep growing indefinitely?

It sounds like a dumb question, but there is only so much money in the world. Assets can grow, but money can only be printed. So if there is 400 trillion dollars worth of money in the world, and the ...
7
votes
1answer
90 views

How time zones affects causality?

Considering that markets open in different time zones, in general the opening and closing times are different. I suppose that a stock market opening later (in the same day) receive information on the ...
7
votes
1answer
226 views

Stock pricing with cross ownership

Cross-ownership is a phenomenon where companies own parts of other companies they do business with. An example: Two companies are now involved in the diamond operation, the mining group Anglo-...
7
votes
2answers
311 views

Do stock markets price in existential risk (i.e. global nuclear war)?

Question Moved from Money StackExchange: https://money.stackexchange.com/questions/74002/do-stock-markets-price-in-existential-risk-i-e-global-nuclear-war Q: Do stock markets price in existential ...
6
votes
4answers
1k views

Why do people trade derivatives?

If I have information that an asset will increase or decrease in value, I can profit on that information by buying or shorting the asset. Why, then, would anyone trade derivatives when they can just ...
6
votes
2answers
117 views

Why do banks and stock exchanges close/have fixed hours?

Banks and stock exchanges all around the world seem to adhere to quite a strict regime of 9-5, Monday - Friday, in the countries local time. This can have the effect of where an event that happens ...
5
votes
3answers
2k views

What is the exact relationship between the efficient-market and random-walk hypotheses?

The efficient-market and random-walk hypotheses are often discussed together as formalizations of the idea that "you can't consistently beat the stock market". But in my experience, they're often used ...
5
votes
2answers
908 views

What does a stock market index stand for?

I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, ...
5
votes
1answer
60 views

Are stock exchanges market makers?

Are stock exchanges like NASDAQ and NYSE market makers? In other words, are they providing liquidity by pairing individual buyers and sellers with each other in real-time? Or does it work differently?
5
votes
2answers
127 views

How is the GDP growing when nothing else seems to be?

We've had strong GDP growth all three quarters this year. To me, that would indicate that, in at least some areas, we should be seeing growth. However, from my extremely ignorant armchair, it doesn't ...
5
votes
3answers
2k views

Why was Modigliani-Miller so relevant and innovative when it came out?

The Modigliani-Miller theorem*, a foundation of modern corporate finance, basically states that, in a no-frictions world, two identical firms have the same enterprise value, regardless of their ...
5
votes
4answers
184 views

What would happen if a company bought back of all of its stock? Would it own 100% of itself?

Companies occasionally own some of their own stock. A company owning its own stock is actually pretty weird when you think about it. If I own 1% of a business's stock (and therefore own 1% of the ...
5
votes
1answer
7k views

Did JP Morgan mitigate the effects of the Great Depression?

I had heard that, at the start of the Great Depression, JP Morgan and other bankers attempted to prevent the depression by purchasing some of the overpriced stock. Did the actions of JP Morgan and the ...
5
votes
2answers
393 views

Are there any major commodity markets with a public order book?

Most major exchanges seem to have secret order books. For example, on the NYSE only the specialists know the order books. On the NASDAQ only the market maker can see the order book. On Globex, the ...
5
votes
2answers
2k views

What would happen if stock markets were open 24 hours?

Suppose you are a broker or a trader, and the stock markets will be open 24 hours a day. What would be the implication for you as a broker in this scenario? I mean: How will your strategies change? ...
5
votes
1answer
408 views

Normalizing comparisons of corporations and countries

When publicly-traded corporations reach record valuations, articles in the media often compare such valuations to the GDPs of countries throughout the world, typically in the form "Company X's ...
5
votes
1answer
1k views

What are the effects of the increase/decrease in stock options after an IPO?

Research : As far as I can understand : Stock options are used to increase the capital of companies to realize some projects Shares are divided into two categories : o Free float (which is the ...
5
votes
1answer
89 views

What's wrong with have a 'one second tick' on stock market trades, to prevent high frequency trading? [duplicate]

Part of how high frequency trading works, is by taking advantage of millisecond advantages over other traders in communicating with the stock exchange. To gain these advantages, high frequency ...
5
votes
2answers
110 views

Why US market is falling due to greece fear?

I'm kind of curious to learn why US markets are falling due to Greece - Eurozone crisis. US had almost no exposure to Greece bonds and the fear of Grexit and the future of Euro has made the investors ...
4
votes
3answers
91 views

Why does a company want the value of its stocks to be as high as possible?

My professor claims that a company want the value of its stocks will be as high as possible. Why should the company care? The company "minds its own business" and make its money. Why should it cares ...
4
votes
3answers
327 views

How can the share price of a company be less than its (theoretical) liquidation value?

A recent article from Bloomberg states that Deutsche Bank's share price is less than half its theoretical liquidation value. According to Investopedia, liquidation value is defined as: The total ...
4
votes
1answer
627 views

Demand Curves for Stocks

i am currently working on a paper on demand curves for stocks and have some questions. I've read that many models (CAPM, APT, Modigliani-Miller theorem) assume demand curves for stocks to be flat. Can ...
4
votes
1answer
52 views

Are stock trade commissions evidence of anti-competitive practice?

A typical commission on a typical stock trade these days is $8. I don't understood how it can cost this much. It looks like the entire process is happening in software, electronically, and so the ...
4
votes
2answers
45 views

What does a "sell-off" mean if every stock transaction is balanced?

If every stock transaction is "balanced" (1 sell = 1 buy), then what does a "sell-off" actually mean and how does it move the price of a stock? Ex. If millions of people sell a stock, there's ...
4
votes
1answer
123 views

Introductory or Primer text on Economics?

I've been meaning to learn more about economics, and am looking for an introductory text or a primer on the topic. I've already taken a subject on this back in high school, but I guess what I'm ...
4
votes
0answers
57 views

How exactly do Participatory Notes induce volatility into the economy?

I was reading up on participatory notes. Wikipedia defines these as "instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian ...
3
votes
3answers
370 views

Does my research prove market inefficiency?

The long story short, I have developed an index based on a certain distribution. Then I aligned NYSE stocks according to this index i.e. the stocks with the best fit are first and the worst are last. ...
3
votes
1answer
43 views

Market Value of a publicly traded company

I want to know the market value (market capitalization) of a company on a particular day in the recent past (within the past 5 years). How can I do this, may be with the help of Google Finance or ...
3
votes
2answers
489 views

Why does firing employees appear to increase the share price of a company?

The last case is GM in the USA. I fail to understand why does this happen. I understand that laying off jobs means higher dividend for the share holder and thus higher stock prices but in the long run ...
3
votes
1answer
50 views

The appeal of low-dividend stocks when trading with government debt

Background: In the 1710s, the British government borrowed heavily to finance wars. To reduce the interest on this debt, the government converted this debt into stock from a private company. The ...
3
votes
4answers
3k views

Does each stock exchange only trade in one currency?

And if not, how are currency exchange rates accounted for?
3
votes
1answer
69 views

Can stock exchange workers go on strike?

Today, trade in the stock exchange of my country Israel (TASE) was cancelled due to a union dispute. So clearly, in Israel the answer to the question in the title is "yes". I can't say this comes as a ...
3
votes
2answers
82 views

Why does Samuelson say common stocks are better than bonds and preferred stocks during inflation?

I’m reading the first edition of Paul Samuelson’s Economics (1948). In Chapter 6, “Business Organization and Income,” after describing bonds, preferred stocks, and common stocks, he writes: To test ...
3
votes
2answers
542 views

Monetary Base vs. Stock price

link: https://research.stlouisfed.org/fred2/graph/?g=3big I have watched this video where he explain this chart. Basically he shows high correlation between Monetary Base and the Stock Market. But I ...
3
votes
2answers
573 views

Is money supply affected by the stock market?

Do stock prices have any effect on the money supply of an economy? Please provide a simple example if possible. Intuition suggests there is more money around when prices are high (consider for ...
3
votes
1answer
71 views

Why does the stock market tend to grow over time

At its most basic, the value of a stock depends on how much people are willing to pay an entity that already owns the stock to transfer ownership. The question is, why does the amount people are ...
3
votes
1answer
74 views

Clarifying the meaning of market capitalization

I'm new to this kind of topic and I'm trying to get a deeper understand. I read that "the shares' price times the number of shares outstanding is the value of a company (=market capitalization)". ...
3
votes
3answers
142 views

Where is there more money: Bank Accounts or Brokerage Accounts?

There is a significant amount of money in the stock market in US companies. For example, look at the largest US company by market cap - Apple. It is currently worth over 800 billion US dollars. I've ...

1
2 3 4 5 6