The Role of Macroeconomic Variables in the Financial Market

To avoid spurious results, unit root tests using Augmented Dickey-Fuller (ADF) (Dickey and Fuller, 1981) and Philips-Perron (PP) are performed to determine the time-series properties of the variables employed in the analysis. Two or more variables are said to be co-integrated when they exhibit long run equilibrium (relationship) if they share common trend(s).Therefore Auto-regressive distributed lag bounds approach (ARDL) is used to test it. The choice is based on several

The Federal Reserve System, often referred to as the Fed, is the United States central bank. It was created by Congress to provide the nation with a safer, more flexible and stable monetary and financial system. The Fed is an independent institution that is to some extent influenced by the government. It is under the supervision of the congress. On the other hand, as an independent body, the Fed has the power to act freely, without its decisions being ratified by the President of the United States, the Congress or any other executive member of the government and is structured to be economically independent. The Fed is also composed of twelve numbered districts, each with its own Federal Reserve Bank.

| The hypothesis that market prices reflect all publicly available information is called efficiency in the:Answer

The United States stock market has experienced many interesting events this year, testing the nerves of millions of people around the world. The market started the year with the worst two-week performance in its history, creating a lot of uncertainty for the year to come. A severe decline in oil prices caused many firms within the energy industry to suffer. However, despite these negative events, gold saw its best quarter in 30 years, the market had a large reversal, and oil has been recovering. These volatile movements provided an amazing opportunity to make money for investors, relief for those who had holdings during this time, and a better outlook for firms. Two firms that have had an interesting year so far are ExxonMobil Corp. and Apple Inc. Exxon has experienced the effects of macroeconomic variables, while Apple has had some internal issues that lead to some stock price fluctuations.

A Study on S&P 500 Index Stock Return and Volatility using ARIMA and GARCH Modeling

The stock market in the United States is run so anyone can view the trades, their values and no information is hidden. Compared to the stock market, the bond market is run behind closed doors causing problems in the economy. The difference between the two markets became more understood during the Great Recession. When the unethical ways of individuals in the selling of bonds caused corruption that contributed to the recession, many people were hit by the repercussions of the selfish actions. Selling the bonds to people who weren 't in good financial situations became a normal action which cheated many individuals out of money. The bond market would be better off being transparent parallel to the stock market because less people would

Since the great depression, the global economy has been facing a number of ups and downs. With the markets being built rapidly and crashing down in the other instant, elements that actually make up the skeleton of the international economy seems to have correlated variables. These variables seems to have been correlated with each other in numerous combinations and their correlation is what makes the market fluctuate. The volatility of the global market becomes more apparent in times of recession when the correlation between variables like stocks, bonds, US dollar, Euro, gold and oil becomes more apparent. Therefore, it is of paramount importance that these correlated variables should be studied with a very keen eye. Since the link between currencies, commodities, stocks an bonds runs very deep, change in any one of them seems to have a profound impact on the rest hence changing the face of the market.

You may not think much about the stock market when thinking of buying a house because you probably don’t think there is any relationship between the two. However, it is important to keep track of stock market performance, especially during times of volatility because it does have a direct impact on your cost of home ownership.

That’s because wealthy Americans are more likely to have investments in the stock market. When the market falls, so do their tax payments. Stock market turmoil can hurt state pension funds, too. But while it takes years for states to feel that impact, a dip in the markets — or a lackluster Wall Street bonus season — can create an immediate fiscal crisis.

Better Markets is the voice of the people in the most important decisions about our financial markets. We are working for a balanced economy—one in which those who make and enforce the rules are thinking about the wallets, homes and dreams of the majority of Americans. As a nonpartisan, nonprofit advocacy organization, we seek action on Wall Street and in Washington, DC, that expands security, opportunity and prosperity for all.

Anything else (besiders income—such as population or taste) that affects consumption is assumed to enter through autonomous consumption—this shirts the consumption function.

It has been an inauspicious start to 2016 for risky assets: equities have endured their worst first week of the year since 2000. The main trigger has been renewed weakness in the Chinese currency and equity market. Offshore yuan futures contracts indicate -10% devaluation versus the US dollar this year. Global financial conditions have tightened and there must be concern that this further stokes deflationary psychology and intensifies the growth headwinds already in place. The events in global financial markets will not have gone unnoticed by the Federal Open Market Committee (FOMC). The key issue is whether further declines in risky asset prices threaten to undermine the economic and inflation outlook. The minutes to the 15-16 December policy meeting were released last week and were widely interpreted as being dovish. It was, however, a statement by Fed Vice Chairman Fischer, who sees four increases in the federal funds target in 2016, that also put equity markets on a bearish footing. The gulf in the policy outlook between the FOMC and financial markets remains considerable: federal funds futures contracts expect the target to be 0.75% in December compared to the 1.25% forecast by policy makers. The expectations of financial markets have, however, recently been more accurate about monetary policy conduct than the forecasts of FOMC members themselves. Fed policy is data dependent and the early economic releases in

The paper examines the emerging stock markets in BRICS countries based on the existing dependence structure and other global factors such as S&P index and the security prices

Testing the stationary properties of time series is a very important exercise as the use of stationary time series data in the Classical Linear Regression Model will result in inflated results. The results are likely to be inconsistent and with a low Durbin Watson (DW) statistic. Several methods can be employed to test whether the time series variables are stationary , these includes residual plot but this paper will employ the Augmented Dickey Fuller (ADF) to test the existence of a unit root. Conclusion of stationarity is going to be considered at 1% and 5% level of significance only. Any probability of each variable below the two values will be considered stationary. If the model fails to meet the stationary requirement, we will use the differencing method to make our model stationary.

Strategically, crude oil has very crucial role in country’s economy. Considering this significance we are trying to analyze the relationship between volatility in crude oil prices and its impact on the Indian economy. This topic is apposite to the current situation where India imports almost 90% of crude oil need. The purpose of this paper is to determine the relationship between crude oil prices and the change in GDP, CPI, Inflation.