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Macroeconomics Forces Affect Stock Prices - Coggle Diagram
Macroeconomics Forces Affect Stock Prices
Interest Rate
As interest rate shoot up :small_red_triangle:so does the discount rate :small_red_triangle: which resulting in declining of present value of future earning :small_red_triangle_down:
Stock price will decline :small_red_triangle_down:also it is sign of negative effect to stock market :heavy_minus_sign:
Inflation
Higher inflation :small_red_triangle: reflect to the higher the interest rate :small_red_triangle:
purchasing power will decrease :small_red_triangle_down:, therefore it indicates negative effects on stock prices :-1::skin-tone-2:
Unemployment
The increasing of unemployment rate :small_red_triangle: shows that the negative :heavy_minus_sign: impact on stock prices which business start to fall behind :-1::skin-tone-2:
Real Growth in GDP
Valuation of services and goods produced that carrying out within a year of a country of its GDP included rent, salaries, wages and many more
When it result to positive performance :heavy_plus_sign:, it showed that the stock market is in good condition :+1::skin-tone-2:
Industrial Production
Indication of output of industrial sector in economy activity such like mining, manufacturing and utilities.
The sensitivity towards interest rates and consumer demand is high
So, increasing continuous :small_red_triangle: shows the advantageous and good market
Budget Deficit
The more the economy shrink and depressed :small_red_triangle:, it can cause to stronger economic environment inflation :small_red_triangle: so eventually it will produced negative impact to the stock prices :heavy_minus_sign: :-1::skin-tone-2:
Money Supply
When money supply increased :small_red_triangle:, demands will increase :small_red_triangle:
In which the sign of economic activity increasing :small_red_triangle: and indicate rise of cash flows eventually the stock price will rise too :small_red_triangle:
Weak Dollar
Insignificant to foreign investor as it has negative effect on the market. However, due to weak dollar produce affordable products then it has positive effect on the economy :heavy_plus_sign: