The Stock Market is a tough nut to crack for everyone. Even some of the top investors that have made millions, and in the case of Warren Buffett and some others, billions out of it, do not have the perfect formula for achieving success. Sure, there are many guides and manuals that one could read for strategies and market indicators, but they would not tell the reader which stocks they should invest in. At best, they impart knowledge on how one can identify and make the best trade possible.
However, one thing that is pretty much common in every stock manual is the need for one to stay up to date with the latest stock market news. There are many stock news publications in the market, and as this Seeking Alpha review shows, it’s important that traders choose a service that is a good fit for their personal needs.
A lot of the market fluctuation happens due to speculation. The sentiment of how a stock is perceived by the market is the most crucial factor in determining the price of that individual stock. The importance of being in the know with the global financial news is something that cannot be understated, and it is valid for both a retailer and brokers. Here are a few types of news you should pay attention to.
Financial Reports and Analysis
Take the case of any publicly traded company. They are required by the law to report their financial earnings to their stockholders as well as the public in general. Now, how the company has performed in the financial quarter will determine whether more investors would be interested in purchasing their stocks or they would prefer to dump their holdings in the expectation of a price drop.
Now, that is one way the news about the company’s performance in the last quarter or several quarters impacts its stock price. But it is also possible that the stock price may fall even with a positive financial report. This is caused by the company performing lower than the market’s expectations. Naturally, this makes it crucial for one to be aware of the stock analysis and market expectation of the company’s earnings.
Good News/ Bad News
A company’s financial performance is not the only parameter that determines the rise or fall of its stock prices. It is just one among the many. The general market mood is equally crucial for the rise/ fall of stock prices. Negative market performance, a lapse in corporate governance, a souring financial situation, etc., will encourage investors to sell their shareholdings and cut their losses. The same is the case with political and geopolitical news as well. Turbulence in the political situation and geopolitical conflict also dampens the market’s mood.
On the other hand, if the news is positive (on any front), it would encourage the investors to buy more stocks, both for long-term and short-term investments. Good earnings reports, the launch of a new product, expansion in new markets, corporate acquisition, and positive indicators in finance and geopolitics will generate buying pressure, resulting in a steady increase in stock prices.
Not all Bad News is bad for stock prices.
Now, one should not be under the impression that all bad news would negatively impact the stock prices. Take the case of COVID-19, a horrendous period in human history. Not only the death toll was in millions, but businesses and individuals had to suffer financial hardships and uncertainty. However, one sector saw a record surge in stock prices and revenue: pharmaceuticals and health care. The unmatched demand for PPE kits, sanitizers, medicines, and health care products made them a profitable trade for investors. Pharmaceutics companies like Pfizer are still seeing the rewards to this day, with their stock prices and the company’s market valuation higher than ever.
All this indicates the importance of being in the know about the latest stock news, especially if one does not want to be left behind. The trends in the Stock market change rapidly, with an investor having a small window to maximize their profits. Hence, one must do everything they can to be informed about the latest happening in and around the Stock market.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes