Stock market
Stock marketWhen I first started the stock game, I really didn't know what I was doing and which companies to buy. Therefore, I just pick the companies that have the best dividend and did well in the past. Also I picked the companies that I've heard of and familiar with. Then as I've become more familiar with the stock game, I realized I should go with the high-tech computer companies, since they were doing real well. Overall, I bought those companies because I thought they would do well in the future and those companies provide good dividend. Also I picked some companies that consumers will never lost interest on, such as CocaCola and Disney. The reason I chose Long's Drugs because I believe it plays an important role in people's life. Everybody buys the medical care from there, it's not a very expensive cost for the middle class, and the recent America is leading by the huge amount of middle class.
AMD, Yahoo, and AOL are the high tech companies I bought. I think they went up quite much than others. It seems like most of the companies that are related to computer or Internet went up. For example, American Online could be very well known Internet Company in the United States. Before I bought it, I look up the Internet and research for it. For the three months ended September 30 1998, total revenues rose 64% to 858 million, Net income rose from 32 million to 108 million. Result reflects increase member of subscribers. From the information I got, I predicted that this stock could gain the profits for me so I chose it.
Also from the Dow Jones Industrial Average, I can tell how economy goes in the world. It's the oldest and most widely used measures of the overall condition of the stock market; each of the four averages is price-weighted and includes a few dozen widely held stocks. There are four Dow Jones Averages: Industrial, Transportation, Utilities, and Composite. The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip NYSE stocks, primarily industrials. Also I would check Standard & Poor's 500 (S&P 500) a market-value weighted index of 500 blue-chip stocks, considered to be a benchmark of the overall stock market to see how well are those blue-chip going. From the information I got, I can easily see that that the U.S. economy is poised to reach unsustainable growth levels. The Import Prices Index for May rose a stronger than March.
Prime Lending rate also effect the stock market, it's the interest rate that commercial banks charge their most creditworthy borrowers, such as large corporations. The prime rate is a lagging indicator and it also relates to an interest rate, which can be periodically adjusted up, or down, usually in response to changes in the prime rate. When the inflation is high the prime rate goes up to cut money supply. Also the interest rate that banks charge each other for the use of Federal Funds. It changes daily and is a sensitive indicator of general interest rate trends.
Mortgage also effect our economy because the term of the loan affects how quickly I pay down the principal amount I borrowed, it also adjusts my total cost by the amount of equity I've build in the property by making payments. It's a pledge of property as security for payment of a debt. If the borrower (the mortgagor) fails to pay the debt, the lender (the mortgagee) has the right to seek foreclosure, a procedure through which the property is sold to satisfy the lender's claims. Almost any kind of property may be mortgaged; the most familiar mortgage is that on a home. Adjustable rate mortgage is a mortgage with an interest rate that may change, usually in response to changes in the Treasury Bills rate or the prime rate.
Treasury Bills is a negotiable debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of one year or less. Exempt from state and local taxes, it's also called Bill or T-Bill or U.S. Treasury Bill. Treasuries are negotiable. If you own Treasuries you can sell them at any time, there is a ready market, and the sale price depends on market interest rates. The Treasury bond is a negotiable, coupon-bearing debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of more than 7 years. Interest is paid semi-annually and exempt from state and local taxes.
Crude Oil is an important factor recently because of the gas price increase. Looking at the indicator, we can see that it steadily increased from 11.68 to 18.06 (peak), but is dropping to 16.34 as of 6/2/99. This has some effect on other parts of the economy, but not as severe as was in our role-playing presentation. No significant changes in gold, CRB, and wheat just means that the prices has being stable for these products, which is good for the economy. Since no drastic ups and downs were created.
Japan Nikkei, London stocks, and Hong Kong stocks are also important to our nation. Though small impacts on other countries did next to nothing to our economy, a big change, such as the big drop in Japan Nikkei awhile ago, has a good size effect on our economy as well. Since a lot of companies rely on overseas operation to maintain their size and power. London stocks and Hong Kong stocks are going up, much like the Dow Jones Industrial Average, this is a good sign of global economics.
The US has the most powerful, diverse, and technologically advanced economy in the world, In this market-oriented economy, private individuals and business firms make most of the decisions, and government buys needed goods and services predominantly in the private marketplace. US business firms enjoy considerably greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, lay off surplus workers, and develop new products. At the same time, they face higher barriers to entry in their rivals' home markets than the barriers to entry of foreign firms in US markets.
Lastly, fund exchange such as Yen, Taiwan Dollar, and Euro compares other countries economy to that of U.S. As other country economy gets better, their dollar value is less than that of the U.S., thus meaning their economy is better, and the better other countries economy is, the better our country is. From the indicator, we can see how well our economic growth is.