Question

What factprs affect the stock market? Will the market rise or drop in the next three months?

Answer 1

The stock market depends on the prices of individual stocks.
The following factors affect the price of any given stock and the market:
a) company performance
When a company has good earnings the stock price usually goes up.
On the other hand, when the company has bad earnings the stock price usually
goes down.
b) valuation
The P/E multiple (price per share/earnings per share) compared to peer
stocks in the industry can also determine the stock price. An undervalued
stock has a low P/E multiple relative to its peers. An overvalued stock
has a high P/E multiple relative to its peers.
c) the economy
A good economy usually means that stock price will trend upward.
A recession usually leads to a decline in stock prices.
d) interest rates and inflation
When the federal reserve changes interest rates to either boost the economy
or to control inflation, the market reacts either positively or
negatively to the news.
e) market sentiment
The market moves up and down based on the sentiment of investors.
Stock prices move up and down based on the supply and demand for stocks.
f) fundamental factors.
The stock price of an oil company for example moves up and down based
on the price of oil. Each industry and company has fundamental factors that
are unique to that company or industry.
The fundamental factors result in moving the stock prices up and down.
The market in the next three months will depend on the trade war between
America and China. In addition, the market will depend on whether the Federal reserve
raises or lowers interest rates. The market will also depend on the performance of the U.S
economy. The overall sentiment among investors is positive, so the market will most
probably rise.