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On the same scale, inequality for net worth rates a 0.87, up from 0.83 in the 2001 survey. I have attached the questions. An institutional investor, needing to diversify, may reduce their position in a stock and thus increase supply enough that it impacts the stock's price. By comparison, share prices tumbled for about two years around the early 2000s recession. Image source: Getty Images. Browse other questions tagged, Start here for a quick overview of the site, Detailed answers to any questions you might have, Discuss the workings and policies of this site. Thus, it's unexpected news not just any old news that drives prices in one direction or the other. The International Monetary Fund rang alarm bells about the issue of growing market power back in 2019 (read our newsletter about it). When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. 7 Reasons the Stock Market May Crash Again and 3 - The Motley Fool The DJIA traded down because of increased uncertainty concerning the future, including the possibility of more terrorist attacks or even a war. Beware the 'melt-up:' Analysts say stocks may soar just - CNN Schnaebl noted that if a drop were to happen, "The question is why does it happen, and usually these things don't come out of the blue.". Itay Goldstein, a professor of finance and economics at the University of Pennsylvania's Wharton School of Business, told ABC News that the measure is essentially used as "an indication for whether the stock price is too high or not.". 1. markets - Why does a stock's price fluctuate so often, even when fresh There is a nearly infinite number of factors that can cause the stock market to move significantly in one direction or another, includingeconomic data, geopolitical events, and market sentiment. Apart from this, people often speculate where the market is heading, which is often determined by changes in prices. By clicking Accept all cookies, you agree Stack Exchange can store cookies on your device and disclose information in accordance with our Cookie Policy. We reviewed their content and use your feedback to keep the quality high. They will buy it, driving the share price up, in anticipation of even better sales to come in the current quarter. Wall Street traders don't try to follow the news. This same scenario occurs when the overall market moves: there are more buyers/sellers of companies in the stock market than sellers/buyers sending the price of companies up/down along with the overall market. In most cases, professional traders react in anticipation of an event, not when the event is reported. When Shiller first published his research in 2000, he pointed to how high stock prices were at that point relative to the fundamentals that should underly their prices. Bad news for some stocks is good news for others. The balance. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Investors expect German automobile firms to reap a rate of return of 12%. They are among many government reports that are used as lagging indicators and leading indicators. hide caption. Investopedia does not include all offers available in the marketplace. Widen the focus to include the top 10 percent, and youve found 84 percent of all of Wall Street portfolios value. News does not come out at regular intervals and it does not necessarily spread evenly. As bonds are considered safer investments than equity, the rate of return offered by bonds is typically expected to be lower than the rate of return offered by equity.