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The future of the stock market: Why bad news has no influence on rising prices.
Many laypeople are surprised that stock prices rise when bad news is announced. Or that the stock market is weakening even though not a single cloud is darkening the economic sky. In the fall of 2023, as war, terrorism and migration dominate global headlines, many believe that the stock markets will have to fall because no one wants to invest under these circumstances. But this idea is wrong - for several reasons. According to a report by www.dasinvestment.com, there are several factors that suggest that stock prices could rise in the near future. One reason for this is the possible slowing of the rise in interest rates as the inflation rate appears to be better under control. This could...
The future of the stock market: Why bad news has no influence on rising prices.
According to a report by www.dasinvestment.com, there are several factors that suggest that stock prices could rise in the near future. One reason for this is the possible slowing of the rise in interest rates as the inflation rate appears to be better under control. As a result, lower interest rates could put less strain on companies' results and justify higher prices. Medium-sized and smaller companies in particular, which have suffered the most from the massive interest rate hikes since 2022, could benefit from a decline in short-term interest rates.
Another positive factor for rising stock prices is seasonal development. Statistically, there is a high probability that stock prices will rise from November to April. This pattern has been confirmed many times in the past, with the correction in August and September often bottoming out in October. Last year, the DAX rose by around 35 percent since then.
In addition, negative sentiment among investors often indicates rising prices. Currently, 40 percent of retail investors in the U.S. are negative about the stock market, which is above average. As a contrarian indicator, these investors may be reluctant to buy if prices actually rise. However, if prices continue to rise, they could act as “laggards” and drive the price increase further.
These factors show that stock markets can rise even in times of crises and bad news. Historical examples from 1962, 1979/80 and 2011 show that such critical epochs are often followed by significant price increases.
Overall, there are many indications that share prices could rise in the near future, despite negative news and crises. However, it is always important to monitor the market closely and continue to analyze developments in order to make informed decisions.
Source: www.dasinvestment.com
Read the source article at www.dasinvestment.com