Tradersguruji

  T he stock market affects individual businesses by influencing consumer spending and providing the chance for stronger returns on capital costs. Consumers spend more during bull markets because they feel wealthier when they see their portfolios rise in value. During bear markets, they pull back on spending, fearing an erosion of wealth and purchasing power as the value of their investments contracts. A rising stock market also increases the value of stock as a currency, enabling a business to raise more capital by issuing shares or even to use stock as leverage to acquire competitors. Defined as the market in which ownership shares of businesses are bought and sold, the stock market is a valuable tool for gauging the health of the overall economy, though it occasionally misleads. A quip among economists is that the stock market has correctly predicted 15 of the last three recessions. Steep stock market declines preceded the Great Depression in the 1930s as well as the Great Reces...