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Factors That Impact Stock Demand
The major factors that impact the demand for stocks are economic data, interest rates, and corporate results. Economic data reveals information about the state of the economy. If the economy is doing better than expectations, it creates more demand for stocks in anticipation of better earnings.
Interest rate increases tend to lead to decreased demand for stocks as the risk-free rate of return rises. Of course, rates tend to rise when the economy is improving, which boosts demand for stocks, so these forces moderate each other.
Corporations' profits, sales, margins, and outlook have a massive impact on demand for individual shares, accounting for the volatility that emerges before and after they release their results for the quarter or year.
Factors That Impact Stock Demand
The major factors that impact the demand for stocks are economic data, interest rates, and corporate results. Economic data reveals information about the state of the economy. If the economy is doing better than expectations, it creates more demand for stocks in anticipation of better earnings.
Interest rate increases tend to lead to decreased demand for stocks as the risk-free rate of return rises. Of course, rates tend to rise when the economy is improving, which boosts demand for stocks, so these forces moderate each other.
Corporations' profits, sales, margins, and outlook have a massive impact on demand for individual shares, accounting for the volatility that emerges before and after they release their results for the quarter or year.