lap: qs-040 objectives explain how stock prices move in the stock market. discuss causes of stock...
TRANSCRIPT
ObjectivesObjectives
Explain how stock prices move in the Explain how stock prices move in the stock market.stock market.
Discuss causes of stock price fluctuations.Discuss causes of stock price fluctuations.
Explain how stock prices move in the Explain how stock prices move in the stock market.stock market.
ObjectiveObjective
Stock PricesStock Prices
• Can fluctuate in the Can fluctuate in the short termshort term
• Not a concern for Not a concern for long-term investorslong-term investors
How the Stock Market WorksHow the Stock Market Works
• ExpectationsExpectations
• Supply and demandSupply and demand
• ““Bull” and “bear”Bull” and “bear”
A Stock’s PriceA Stock’s Price
• What buyers are willing to payWhat buyers are willing to pay
• Ask price = lowest sell priceAsk price = lowest sell price
• Buy price = highest buy/bid priceBuy price = highest buy/bid price
• Some prices are volatile.Some prices are volatile.
One Share
$2.50
One Share$2.83
Discuss causes of stockDiscuss causes of stockprice fluctuations.price fluctuations.
ObjectiveObjective
Stock Price InfluencesStock Price Influences
• Company
• Communication
• Industry
• Economy
• World events
By category:
Company InfluencesCompany Influences
• Earnings projectionsEarnings projections
• Executive managementExecutive management
• New productsNew products
• Business-model changesBusiness-model changes
Communication InfluencesCommunication Influences
• InvestorsInvestors
• AnalystsAnalysts
• IndexesIndexes
S&P 500S&P 500
Industry InfluencesIndustry Influences
• TrendsTrends
Upward = improvement Upward = improvement
Downward = problemsDownward = problems
• CompetitorsCompetitors
• Inflation and recessionInflation and recession
• Cyclical stocksCyclical stocks
• Economic indicatorsEconomic indicators
GDPGDP
InflationInflation
Interest ratesInterest rates
Unemployment ratesUnemployment rates
Federal government’s budgetFederal government’s budget
• Government actions Government actions
Economic InfluencesEconomic Influences
• NaturalNatural
World Event InfluencesWorld Event Influences
TsunamiTsunami
HurricanesHurricanes
• PoliticalPolitical
September 11thSeptember 11th 9
• What’s the difference?What’s the difference?
EarningsEarnings
Earnings expectationsEarnings expectations
• Should you judge based Should you judge based on expectations?on expectations?
• Quarterly reports: Quarterly reports: Are they important to Are they important to long-term investors?long-term investors?
Hoping for the BestHoping for the Best
Quick CaseQuick Case
MarkED
Acknowledgments
Original DevelopersChristopher C. Burke, Mary C. Hollaway, MarkED
Version 1.0
Copyright © 2007MarkED Resource Center
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