Several factors affect an investor’s thriving daily trades. Depending on the company’s specific factors, investor’s personal trading goals, and strategies, the factors affecting stock market and the facts that an investor should focus varies. That being said, all investors should be aware of some of the more common market-moving influences that can affect a stock’s movements. By becoming aware of market influences, investors can make better entries and catch the maximum return. The following are some common factors that can substantially impact the average day’s trading.
6 Factors Affecting Stock Market
- Company News and News that Affect the Company
- Market/Economics Overseas
- Daily Trade Volume
- Futures Data
- Quarterly Earnings
- FDA Approvals
Company News and News that Affect the Company.
When it comes to news, there are two types. One is company news, and the other is news that affects the company directly or indirectly. When day trading, an investor should focus on both company and other news related to the company; as news can have both positive and negative effects on a company stock price, and overall factors affecting stock market for the day.
By the time NYSE opens for trading, markets in Asia and Europe have already or almost finished their trading day. Therefore, if individual stocks or sectors have done particularly good or bad in those markets, the motion could impact trading in the U.S. as well.
Daily Trade Volume
High daily trade volumes are most often a positive sign to invest in a certain stock. When the daily trade volumes rise, specifically insider trade volumes, that is a good sign for an investor about the potential of that stock and points of entry and exit.
Investors usually tend to buy or sell stock “at the open” at a favorable price. Futures data will give an investor a better idea of whether buying or selling “at the open” will actually be possible. Futures are a strong indicator of what the stock market opening will look like. This will give them a better feel for where the index they are tracking might be headed “after the open.”
Quarterly earnings report releases can also be a strong indicator of a stock’s movement. For example, stock prices usually start to spike close to an earnings report date if the predictions are positive and vice versa. Also, if a company beats its earnings predictions, there is a pretty good chance that the stock spikes up and vice versa.
Specifically, for pharmaceutical companies, FDA approvals can be a very strong indicator of stock movement. Usually, stock prices of companies spike up in the event of an FDA approval. Therefore, it is useful for an investor to keep records on pending FDA approvals as it can be a signal to enter or exit a stock.