What does “after the bell” mean?

July 7, 2024 No Comments

A: “ After the bell” is financial slang for activity occurring after the close of the stock market, including after-hours trading, illegal late trading of open-ended funds (during the mutual fund scandal of 2003), earnings announcements, acquisition plans and merger agreements. The term originates from

What does deflation mean to investors?

July 8, 2024 No Comments

A: The cause and effect of deflation are complex economic forces, which requires a short introduction to the concept and an explanation of how it affects investors. Deflation is a macroeconomic condition where a country experiences lowering prices. This is the opposite of inflation, which

What does marginal utility tell us about consumer choice?

July 7, 2024 No Comments

A: In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction a consumer gets. Marginal utility tells how much marginal value or satisfaction a consumer gets from consuming an additional unit of good. Microeconomic theory

What does rollover mean in the context of the forex market?

July 8, 2024 No Comments

A: In the forex (FX) market, rollover is the process of extending the settlement date of an open position. In most currency trades, a trader is required to take delivery of the currency two days after the transaction date. However, by rolling over the position

What does the Dow Jones Industrial Average measure?

July 7, 2024 No Comments

A: The Dow Jones Industrial Average (DJIA) is the second-oldest and best-known stock market index. Owned by Dow Jones & Company, it measures the daily price movements of 30 large American companies on the Nasdaq and the New York Stock Exchange. It is widely viewed

What does the Fisher Effect say about nominal interest rates?

July 7, 2024 No Comments

A: The Fisher effect is a theory first proposed by Irving Fisher. It states that real interest rates are independent of changes in the monetary base. Fisher basically argued that the real interest rate is equal to the nominal interest rate minus the inflation rate.

What economic factors affect savings account rates?

July 7, 2024 No Comments

A: At a basic economic level, the interest rate set on savings account deposits is determined by the relationship between how much banks value receiving extra deposits and how much savers value the services of a savings account. Those valuations are manipulated by how governments

What economic indicators are important for investing in the financial services sector?

July 7, 2024 No Comments

A: The financial services sector is integral to the overall level of economic activity in the United States and globally. For this reason, most of the major macroeconomic indicators are very important for the sector. Financial services companies rely on high levels of activity to

What economic indicators are important to consider when investing in the banking sector?

July 7, 2024 No Comments

A: The banking sector is a hinge for nearly all economic activity. For that reason, there’s hardly an economic indicator that doesn’t relate to the banking industry. The most important indicators include interest rates, inflation, housing sales, and overall economic productivity and growth. Each bank

What economic indicators are most used when forecasting an exchange rate?

July 8, 2024 No Comments

A: The economic indicators used to forecast an exchange rate are the same ones used to determine the overall economic health of a country. The gross domestic product (GDP), consumer price index (CPI), producer price index (PPI), employment data and interest rates are all key

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