Discuss how the U.S. stock market normally performs to other major markets uring a world-wide recession

Expert Solution

US stock market is the leader of the world stock market. A slight change in the index of US stock market leads to bigger and bigger impact on indexes all over the world. US is the market leader due to its economic presence in all over the world. In addition to this US is indulged in huge level of international trade with many countries including developed and developing countries.

So we can say in the times of world wide recession, every other major markets have greater impacts on it as many countries depend on US for many goods and services, this is the reason any policy change decision in US effect the whole world. Recently we saw that after implementation of lockdown in US, whole world's market crashed with the NASDAQ, DOW and S&P500 (US stock market indexes). A developing country like INDIA is hugely dependent on US and this the reason we always see that whenever US markets crash , Indian markets crash with much greater value and this the case with many other countries too.

Hence we can say that US stock market performs bit better than other markets during a world wide recession.

Rahul Sunny answered 2 years ago

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